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#219, 18 April 2007

India-Malaysia Strategic Dialogue

Chair: Ambassador P S Sahai, Former Indian Ambassador to Malaysia

Political Cooperation

Dato' Husni Zai Yaacob, Ministry of Foreign Affairs, Malaysia

The year 2007 marks the 50th anniversary of the establishment of diplomatic relations between India and Malaysia. A sign of existing good relations between the two countries is their wide range of political cooperation. This can be discussed at four levels.

First, high level visits have been a key aspect of India-Malaysia relations. However, the number of visits from Malaysia has been more than those from India. The second element is the Joint Commission Meeting (JCM), which was set up as a bilateral mechanism in 1992 to facilitate further bilateral meetings as well as serve as a background meeting for foreign ministers level meetings. The JCM also provides a platform for officials to discuss bilateral issues.

The Bilateral Agreements and Memorandum of Understandings (MoUs) provide a framework for bilateral cooperation involving diverse areas of mutual interests. There are currently 11 pending agreements and MoUs which need to be further deliberated. Finally, people-to-people cooperation forms an important component in the bilateral relations. Apart from historical and cultural ties, tourism has played an important role in strengthening cooperation at the peoples' level. Malaysia has the largest number of Indians living outside of India. India has been a traditional destination for Malaysian Indians for education. Now, even Malay-Malaysians and Chinese-Malaysians are coming to India, especially for medical education.

Professor Ganganath Jha, Centre for South, Central, South East Asian and South West Pacific Studies (CSCSEASWPS) School of International Studies, Jawaharlal Nehru University

There exists a high prospect for exchange and sharing of ideas and policies. The new economic policy and the new development policy have witnessed changes in emphasis on issues which are of interest to us. For instance, all ethnic groups in Malaysia, including Malay Indians, receive equal opportunities. In similar patterns, India has also launched Affirmative Actions policies involving the Other Backward Classes. Furthermore, India can also learn from Malaysia's management of relationship with its neighbours. Over the years, Malaysia has successfully managed issues of conflict with its neighbouring countries such as Indonesia, Thailand and Singapore.

Malaysia is of extreme strategic importance to India. It has often been advocated in the past that one can not control the Indian Ocean without controlling the Strait of Malaya. During India's freedom struggle, Netaji Subhash Chandra Bose chose Malaysia and Singapore as the headquarters for the Indian National Army. However, there have been several problems affecting bilateral relations, such as India's membership of Asia-Pacific Economic Cooperation (APEC) and East Asia Economic Caucus (EAEC). India did not receive much support from Malaysia on these issues. Though their objectives are the same, different policies have resulted into differences of opinion.

Security and Defence Cooperation

Maj. Gen. Dato' Allatif bin Mohamed Noor, Ministry of Defence, Malaysia

The larger canvas of defence and security cooperation has been provided by an MoU on Malaysia-India Defence cooperation signed in February 1992. The MoU led to the setting up of Malaysia-India Defence Cooperation Meeting (MIDCOM) at the senior personnel level. The focus of the defence cooperation has been on training of the Malaysian military personnel in India. The meetings have, so far, been able to resolve any difficulties and confusions at the official and staff level.

In order to address military issues at a micro-level, a Sub-Committee for Military Cooperation (SCMC) has been set up. The SCMC has further improvised military cooperation and provided fresh inputs to the MIDCOM. Its first meeting was held in Kuala Lumpur in 2001 while the latest was held in September 2006. Defence cooperation has also taken place under the Indian Technical and Economic Cooperation (ITEC) programme. The Malaysian military personnel have received trainings in India under this programme. The first navy-to-navy talk was held in New Delhi whereas the second navy-to-navy talk will be held in Kuala Lumpur in April 2007.

Dr. Pankaj Kumar Jha, Associate Fellow, Institute for Defence Studies and Analyses (IDSA)

There has not been enough cooperation till date. Does this reflect hesitancy or lack of avenues for India-Malaysia defence cooperation? Both India and Malaysia can further expand their defence cooperation given their use of similar operating systems such as Sukhoi or MIG air planes. India is also providing spare parts of the MIG air-planes to Malaysia. Indian missile technology, radar system, defence component systems and supporting hardware are some of the areas in which the two countries can cooperate. The export of BrahMos has been mooted after the indication that the missile may be supplied to 'friendly countries.'

During the visit of Malaysian Prime Minister, Mr. Abdullah Badawi, cooperation in space technology was discussed. Malaysian scientists are also being trained at Bhabha Atomic Research Centre (BARC). India is closely looking at the efforts of the littoral states such as 'Eyes in the Sky' programme. However, the programme seems to have suffered from lack of hardware. This is the area where India can contribute to capability building of these countries. The communication command and control system and intelligence sharing can be important areas for cooperation. The two countries can work together in developing a database in order to share the information of terrorists in order to pre-empt their moves and apprehend them.

Economic Cooperation

Mr. Rajan Kohli, Federation of Indian Chambers of Commerce and Industry (FICCI)

India-Malaysia economic relations can be discussed in terms of existing scenarios in trade and investment and what can be done to further strengthen the relationship. During the last five years, while India's exports have grown slowly, Malaysian exports have grown much faster. In terms of bilateral trade, the balance is in favour of Malaysia, mainly due to Indian import of palm oil. There exists a good deal of complementarity in bilateral trade. In terms of investment, the bilateral investment has been very limited. The limited growth in terms of investment further reflects the existing potential of growth in bilateral investment.

Therefore, there is a need for further expansion of cooperation in trade and investment. The India-ASEAN Free Trade Agreement (FTA), which is in an advanced stage of negotiation, is in the overall interest of India and ASEAN. India has drastically reduced its tariffs on several products including palm oil, allowing greater market access for ASEAN companies and, therefore, has gone an extra mile in making the FTA a reality. Malaysia needs investment in the services sector such as software services, technology services, health services, engineering services. India has proven expertise in these areas and, therefore, Indian companies can invest, given a congenial environment is provided. Similarly, Malaysian companies can invest in Indian infrastructural sectors such as roads, energy sector, highways, railways and so on. Till now, Malaysian investment has been mainly in the form of contractors which need to be expanded further to full-scale partnership. India can also invest in the resource based industries such as rubber and pulp, which India requires for its industrial purposes. India can also invest in research in bio-technology. Various sectors of tourism also provide an excellent opportunity for bilateral trade and investment, such as health tourism, rural tourism, and eco-tourism.

Dr. Rebecca Fatima Sta Maria, Ministry of International Trade and Industry, Malaysia

The bilateral investment is not up to the mark and there are many areas for investment such as the multimedia super corridor. The whole idea is to open up new areas for cooperation. Significant progress has been made in finalizing the ASEAN-India FTA. There exists a political will on both sides to finalize the agreement. However, the issue of palm oil has held back the process of negotiation. Interestingly, the problem is not of economics but of politics. Malaysia's focus is on moving the bilateral process forward since the ASEAN process is taking too much time. Some mechanisms need to be developed to further negotiate the bilateral economic relationship.


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