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CII welcomes the ratification of India Malaysia CECA

New Chapter in India-Malaysia Economic Cooperation Opens

Exciting New Opportunities in India-Malaysia CECA: CII

The Confederation of Indian Industry (CII) has welcomed the ratification of

India Malaysia Comprehensive Economic Co-operation Agreement (CECA).

Welcoming the CECA, Mr B Muthuraman, President-designate, CII, and Vice

Chairman, Tata Steel, said The India-Malaysia CECA lays the foundation for a

new trajectory of trade and investment ties between the two vibrant and

expanding economies bordering the Indian Ocean, as envisaged in Indias

Look East policy. It will unleash a new wave of bilateral trade and economic

co-operation between India and Malaysia, he added.

Expressing the strategic importance of CECA for the entire Asian region, Mr.

Muthuraman said, The India-Malaysia CECA sets a new agenda for

partnership not only between the two countries but also for the vibrant Asian

region as a whole. He also expressed his eagerness to see an early

implementation of CECA. He said, the Indian industry looks forward to the

implementation of CECA with keen anticipation.

Coinciding with the visit of Mr. Anand Sharma, CII took a 10-member

delegation of Indian CEOs to Malaysia, led by Mr. Muthuraman. The signing

ceremony of the India-Malaysia CECA was witnessed by the Indian delegation.

India Malaysia CECA is expected to take effect from 1st July this year and will

bring the trade in goods, services and investment under its ambit. Going

beyond the India-ASEAN FTA which was limited to merchandise trade, the

CECA opens the door for partnership of the two countries in each others

sectors of opportunity through investment facilitation and other initiatives,

covering financial services, telecommunications, temporary movement of

persons, ICT, biotechnology, etc.

Indo-Malaysian trade tripled from US$ 3.4 billion in 2004-05 to US$ 10.6

billion in 2008-09, before declining to US$ $8.01 billion in 2009-10 during the

global economic crisis. Trade in goods is projected to reach US$ 15 billion by

2015. The balance of trade is in favour of Malaysia, since India is a large

importer of palm oil and petroleum. India will be looking at increasing exports

of two-wheelers, basmati rice, textiles and apparel to Malaysia.

Malaysia is also emerging as a major potential investor in India, with

investments in power, oil refineries, telecommunication and electronic and

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electrical equipment industries, besides highway and other infrastructure

development projects. Notable investments include those of Maxis

Communications in Aircel and TM International in Spice Communications.

Indian companies such as Mahindra Satyam and Biocon have invested in

Malaysia.

Concessions have been made by both sides in CECA. While India has

excluded 73 more items (included silk yarn, chemicals, and three palm

products) from the negative list compared with the negative list of 1,297

items in its FTA with ASEAN. Malaysia has agreed to allow over 50% foreign

direct investment (FDI) in construction sector and to give commercial banking

licences to Indian banks.

During the visit, the CII delegation called on Mr. Y.B. Datuk Seri Mustapa

Muhamed, and discussed the opportunities arising from the CECA. The

Minister assured CII of his support to Indian industry and invited delegates to

invest in promising knowledge economy sectors of Malaysia.

The delegation also participated in a discussion on Ways to Further Enhance

Business Opportunities between India and Malaysia during a meeting with

Mr. Y M Raja Dato Abdul Aziz bin Raja Musa, Vice President, Federation of

Malaysian Manufacturers (FMM) and members of FMM. In an interaction with

senior officials of Malaysian Industrial Development Authority (MIDA), the two

sides expressed their keen desire to jointly develop projects for

implementation of CECA in an optimal manner.

New Delhi

18 February 2011