Strategic Cooperation With Malaysia

CHAPTER I

INTRODUCTION

1. South East .Asia consists of eleven countries that lie between the Indian Ocean
and the Pacific .Ocean. Approximately 625 million inhabitants make this region one
of the most populous regions in the world. The South East Asian countries consist of
Brunei, Cambodia, .East Timor, Indonesia, Laos, Malaysia, Myanmar, Philippines,
Singapore, Vietnam and Thailand. Post 1992, the medium-sized and small states in
the region underwent significant geo-strategic changes and since that time we have
witnessed the. rise of China and the revitalization of US interest in the region. There
are sufficient historical .antecedents for a broader and deeper engagement of India
and Malaysia. Indian cultural influence has been existing in the region between the
9th ' 13th .centuries AD when Indian imperial and military power reached the shores
of .South East Asia through the Chola Empire in South India. The exercise of Indian
military power and presence in the region is therefore not new. An earlier, .more
powerful cultural influence is now metamorphosing itself into political, cultural,
economic .and military manifestations of a 5,000 odd year civilization that has
invigorated South. East Asia's polities and cultures for centuries. The difference
today, however, .is that the revolution in military affairs (RMA) and communication
revolution coupled. with major systemic transformations following the demise of the
45-year Cold .War (1947'1991) have necessitated a review of the engagement of
major .external powers in South East Asia.

2. Additionally, revisionist theories and .approaches in international relations in the

post-Cold War era of globalization, such. as constructivism and liberal
institutionalism have afforded a higher .profile to the role of the Association of South
East Asian Nations (ASEAN) in forging multilateralism and claiming 'centrality' in
building the attendant .regional security architecture of the Asia-Pacific region.
Hence, the impact of the international and regional sub-system on bilateral
relations'intra-regional as .well as extra-regional i.e. between a state in South East
Asia and major external powers cannot be ignored. A combination of realism, liberal
institutionalism, constructivism. and pragmatism is driving relations between big
powers and ASEAN. as a regional entity, and also between external powers and the
individual states of this regional association. .

3. India-Malaysia relations during the Cold War have at best. been clouded by
negative mindsets on both sides, leaving little room for. positive bilateral
cooperation. However, there was a convergence of. perspectives on certain
international issues such as apartheid in South Africa, decolonization, creation of the
Non Aligned Movement (NAM), reform of the international economic order. and South
empowerment. Malaysia's generally pro-Western stance especially on. the Vietnam
War (1954'1975) and the Cambodian conflict (1978'1991) obviated. any form of
substantive cooperation with India which adopted a more pro-Soviet. and pro-Hanoi
stance during those difficult years. As Malaysia consolidated itself. as a nation-state
and made significant economic. progress compared to India's slower growth
hamstrung also by its pro-socialist. orientation during the Cold War, ideological and
political differences widened. Malaysian (especially Malay) perceptions of the ethnic
Indians in the country. (majority being plantation workers) did little to enhance
India's image in Malaysia. After the end of the Cold War and the onset of
globalization major economic reforms. were introduced in India by the former
Finance Minister and current Prime Minister, Mr Manmohan Singh. The reforms
compelled a serious review of emerging. economic, political and strategic
opportunities arising from India's more active. participation in globalization and
enhanced political and economic engagement. with South East Asia via its Look East
Policy. On the Malaysian side, former. Prime Minister Mahathir Mohamad's Vision
2020'a 30-year programme begun. in 1990 of moving Malaysia to developed country
status by 2020 opened up. further avenues for cooperative engagement of the two
economies. Malaysia holds an important place in the region on account of various
factors, the important ones. being its geo strategic location joining the two oceans
and being located on. most important Sea Line of Communication. It has also been
the founding. member of ASEAN, platform through which South East Asian countries
interact. with the outside world. Also, nearly 8 % of total Malaysian population is of
Indian. origin. It is on account of these factors that Malaysia will continue to hold
special. importance to us.

METHODOLOGY

Statement of the Problem

4. To study and analyze India's current relationship with Malaysia in light of the
emerging threats in the South East Asian region and suggest suitable areas for
strategic cooperation and steps to be taken for deeper engagement with Malaysia in
the future.

Justification of the Study

5. India and Malaysia have cordial relations since pre colonial era (with then Malaya),
which are on the path of growth at present. There is a realization that interests of
India and Malaysia converge on various fronts to include the South East Asian
Region which is faced with numerous threats. There is a definite need for the
bilateral relationship to be steered to the strategic level. This study will carry out an
objective analysis of the present relationship between India and Malaysia and
recommend suitable areas for strategic cooperation to counter the emerging
multifarious threats in the South East Asian Region.
Hypothesis

6. There is a need for a paradigm shift in the India ' Malaysia relationship to counter
the emerging multifarious threats in the SE Asian region.

Scope

7. The dissertation will be covered in following chapters:-

(a) Chapter I: Introduction and Methodology.

(b) Chapter II: Background on Malaysia and India's look East Policy with Particular
Reference to Malaysia.
(c) Chapter III: Current Status of India's Relationship with Malaysia.

(d) Chapter IV: Malaysia's Relationship with India vis a vis China.

(e) Chapter V: The Emerging Security Situation and Multifarious Threats in the SE
Asian Region.

(f) Chapter VI: Convergence of Strategic Interests: Need for Paradigm Shift in
Relationship and the Way Ahead.

CHAPTER II

BACKGROUND ON MALAYSIA AND INDIA'S LOOK EAST POLICY

Background on Malaysia

8. Malaysia is a multi ethnic and multicultural country. covering the skyscrapers of

Kuala Lumpur and the jungle headhunters. of Borneo. The major ethnic groups of the
country are Malaya, Chinese and Indians. Malaysia spans. a peninsular area
consisting of Malaya peninsula and the two states of Sarawak. and Sabah, on the
island of Borneo. Malaya peninsula shares a land boundary. with Thailand to the
north. The states of Sabah and Sarawak share maritime boundary with Philippines to
the north and land boundary with Brunei and Indonesia. to the north and south
respectively. The large majority of the populations live on the peninsula. Malaysia
has its origins in the Malay Kingdoms which, from the. 18th century, became subject
to the British Empire. The territories on Peninsular Malaysia were first unified as the
Malayan Union in 1946. Malaya was restructured. as the Federation of Malaya in
1948, and achieved independence on 31 August 1957. Malaya united with Sabah,
Sarawak, and Singapore on 16 September 1963, with si. being added to give the new
country the name Malaysia. However in 1965, less than two years later, Singapore
was expelled from the federation. If one studies the. map of South East Asia it is
clear at once that Malaysia is the natural focus. of the whole region. It is the only
country that is part of the mainland Asia and at the same time part of the vast
archipelago stretching westwards from the Philippines. and new Guinea to Sumatra.
Thus Malaysia is not only a bridge between. continental and island Asia but also the
gateway between South China Sea. and the Indian Ocean . By virtue of this position
Malaysia is of vital importance. to both South East Asia and the world. Although
Malaysia is a small nation. of only 29.24 million people, its economic significance is
out of all proportion to its size. and population. Since independence, Malaysia has
had one of the best. economic records in Asia, with GDP growing an average 6.5% for
almost 50 years.

India's Look East Policy with Particular Reference to Malaysia

9. Gen. The Look East policy has emerged as an important. foreign policy initiative of
India in the post-Cold War period. The essential philosophy of the Look East policy. is
that India must find its destiny by linking itself more and more with its Asian
partners and the rest of the world, and that India's future and economic. interests
are best served by greater integration. with East and South East Asia. Hence, the
Look East policy is an attempt. to forge closer and deeper economic integration with
its Eastern neighbours as a part of the new realpolitik in evidence in India's foreign
policy, and the engagement. with Association of South East Asian Nations (ASEAN)
is the recognition on the part of India's elite of the strategic and economic
importance. of the region to the country's national interests. As Prime Minister
Manmohan Singh said, the Look East policy is "not merely an external. economic
policy; it is also a strategic shift in India's vision. of the world and India's place in the
evolving global economy ."

Evolution of the Look East Policy

10. The Look East policy is the product of various. compulsions, changed
perceptions and expectations of India in the. changed international environment. The
end of cold war brought about a fundamental change. in the international system,
which focuses on the economic. content of relations and led to the burgeoning of the
formation. of regional economic organizations. While India was opening up to the
world market, it became aware of the growing trends towards regionalism and
feared that it will be marginalized. from the dynamics pushing the global economy.
The economic reforms, coupled with the integrative forces of globalization and
frustration with the process of integration. within South Asia made India to rethink
the basic parameters of its foreign policy. The other factors impacting on India's
foreign policy were a rising. China and its impact on India's security, as well as
India's unease at Beijing's growing assertiveness in the Asia-Pacific region The
changed international. system in the aftermath of the end of Cold War, the success
stories of the East Asian Tiger economies and the radical shift in India's economic
and strategic circumstances. caused New Delhi to pay more attention to the rapidly
growing economies of East and South East Asia. As a result of these compulsions,
the Look East Policy. was officially launched in the year 1991 by the government of
Prime Minister PV Narasimha Rao, although the term "Look East Policy" was
mentioned for the first time in the Annual Report of the Ministry of External Affairs,
1995-96. I K Gujral had stated that, "What look east really means is that an outward.
looking India, is gathering all forces of dynamism, domestic and regional, and is
directly focusing on establishing. synergies with a fast consolidating and progressive
neighbourhood to its East in Mother Continent of Asia." India's Look East policy,
thus, marked a dramatic. shift in India's perspective of the world.

Progression of the Look East Policy

11. In the initial stage, the focus of the Look East policy was much on ASEAN. India's
conscious efforts to forge closer economic ties with ASEAN. member states paid
dividends; bilateral relations. between India and ASEAN improved rapidly. India
became a Sectoral Dialogue. partner in March 1993 in three areas, namely, trade,
investment and tourism, a full dialogue Partner. in 1995, member of the ASEAN
Regional Forum (ARF) in July 1996. and finally to a Summit Level Partnership in 2002.
The first phase of India's Look East policy was ASEAN-centered and focused
primarily on trade. and investment linkages. The second phase, which began in 2003,
is more comprehensive. in its coverage, extending from Australia to East Asia, with
ASEAN as its core. The new phase marked a shift in focus from trade to wider
economic. and security cooperation, political partnerships, physical connectivity
through road and rail links. India-ASEAN cooperation now covers a wide field,
including trade. and investment, science and technology, tourism, human resource.
development, transportation and infrastructure, health and pharmaceuticals. India
has signed "Long Term Cooperative Partnership. for Peace and Prosperity" with
ASEAN, which is the corner-stone of India's Look East policy. India prefers to use the
Comprehensive Economic Cooperation Agreement. as a template for Free Trade
Agreements (FTAs) because of its comprehensive coverage of goods and services.
trade as well as investment. When negotiating FTAs, India takes the position that
service trade is as important. as trade in goods. India's trade negotiators believe the
country's economic. strength lies in its services sector. Trade between India and
ASEAN countries is expanding significantly. India finally signed the ASEAN-India Free
Trade Agreement with the ten members. of ASEAN in August 2009.

CHAPTER III

CURRENT STATUS OF INDIA'S RELATIONSHIP WITH MALAYSIA

16. Gen. The India ' Malaysia bilateral relations got a boost. in 2010 after Prime
Minister Mr Manmohan Singh's Visit to Malaysia from 26 to 28 Oct. India and
Malaysia agreed to work on a Framework. for Strategic Partnership, which envisions
development of a multifaceted relationship with a view to elevate bilateral relations
to the level of a long term. and strategic partnership. The first-ever India-Malaysia
CEOs Forum was jointly. launched by both the PMs. Following six documents were
signed during the visit:-

(a) Agreement towards implementing. Comprehensive Economic Cooperation

Agreement (CECA) between India and Malaysia on 1st July 2010.

(b) MoU on Cooperation in the field of. Traditional Systems of Indian Medicine.

(c) MoU on Cooperation in the field of Tourism.

(d) MoU on Cooperation in the field of IT & Services.

(e) Cultural Exchange Programme (CEP) and Agreement between Council of

Scientific and Industrial Research. (CSIR) of India and Malaysia's special innovation
unit called Unit Inovasi Khas (UNIK).

(f) Both countries also agreed to set up a Joint Working Group on Counter-Terrorism.

18. Both governments have also .completed other enabling frameworks. A bilateral
Extradition Treaty was signed in January 2010. A bilateral Treaty on Mutual Legal
Assistance in Criminal Matters. was signed in March 2012. A revised Double Taxation
Avoidance Agreement was signed in May 2012, and a MoU on Cooperation and
Mutual Assistance in Custom. Matters was signed in New Delhi on 13th June 2013 .

Defence & Security Cooperation

19. The Imperatives for Defence Cooperation.

(a) International system. The evolving character of the international system.

together with the opportunities and constraints residing therein, do influence policy
formulations. and directions in pursuit of national interests. The India-Malaysia
defence relationship. is no exception. Globalization is one such imperative. However,
it should be noted that globalization is a historical. process, except that the
intensity, scope and volume of contacts, transactions and engagement. have
increased exponentially due to the communications revolution. The demise of
bipolarity has also removed. structural/ideological constraints and opened up
opportunities for expanding bilateral. as well as multilateral cooperation in a
plethora of fields ranging. from cooperation in hard security, soft security, non-
traditional.security, environment and climate change, to name a few. Modernization..
of the defence sector and infrastructure development in both. countries. have
encouraged the exchange of expertise. The information. technology (IT) Revolution
has boosted India's outreach to Malaysia.. and South East Asia through the services
of thousands of Indian IT. professionals now located in the region.

(b) Rise of ASEAN. External powers including India have been closely monitoring the
development of ASEAN. over the years since its inception in 1967, and its more
recent. empowerment via initiating the process of integration leading. to the
realization of the ASEAN Community by 2015. This global awareness. of the relative
success of regional cooperation and integration in South East Asia. compared to
other parts of the Developing World has stimulated. greater interest in ASEAN's
Dialogue Partners in recognizing. it as a corporate entity. The appointment by
external powers. including the United States of ambassadors to ASEAN as a
corporate. entity merely strengthened the regional entity's legitimacy and relevance.
in working with external partners to jointly address political, economic. and security
issues affecting the region. With all the limitations. of the 'ASEAN Way', the regional
body's adoption of 'process regionalism.' has thus far been able to weather the storm
and to ensure general progress. towards regional stability, security, development
and prosperity. India's perception of ASEAN changed significantly with the demise.
of the Cold War in 1990. Similarly, ASEAN's perception of India changed. equally with
the launch of India's Look East Policy by the government. of Prime Minister
Narasimha Rao in 1991. Like the United States, India began to view ASEAN as the
cornerstone of regional. security in South East Asia. In this new strategic scenario,
India recognized. the critical role played by Malaysia as an active proponent. of
regionalism. Malaysia's stability and steady rise towards developed. country status
within the next decade provided additional impetus to forge. stronger bilateral
relations. India was also cognizant of growing political. and economic. interactions
between China and Malaysia. Gaining more political, diplomatic, economic and
strategic influence in ASEAN became an integral. element driving India's Look East
Policy in South East Asia .

(c) Rise of China. India and China represent the two oldest and largest civilizations in
Asia, and South East Asia. is currently witnessing a resurgence of the influence and
involvement. of these two Asian giants with enhanced political, economic,
technological, and military capacity. The earlier rise of China since the Dengist
reforms. in the late 1970s and 80s which spearheaded large-scale economic. and
military modernization is now impacting upon China's engagement. with South East
Asia. China's trade with the region has grown. in leaps and bounds over the past two
decades. India is clearly taking. note of China's growing political, economic and
strategic engagement. with ASEAN, and would not like to be left behind in the
contest for power and influence. In this regard, there is a convergence of national
interests. of both India and Malaysia as neither would like to see the region
dominated by China. One could also add, the United States is a natural strategic. ally
as Washington would be loath to witness the demise of its influence. in South East
Asia'hence Obama's 're-engagement' policy towards the region. Indeed, the rise of
China is impacting on the regional balance. of power thus obliging small and medium
powers to make adjustments. to emerging realities through 'strategic partnerships,'
'refurbished alliances' and the like. India views Malaysia as a key player in ASEAN.
under its Look East Policy aimed at expanding cooperation with all members. of the
ASEAN Community. The rise of China has increased the strategic importance. of
ASEAN to India and vice-versa. The dynamics of balance of power. is obliging India
to be more engaged as an Asian power in South East. Asia, while Malaysia's policy of
equidistance obliges the government. to seek closer strategic cooperation with India
and the west, especially the United States.

(d) Maritime Security. South East Asia's strategic location astride key trade routes
and vital sea lines of communication. enhances the geopolitical significance of the
region to the major. commercial powers of the world. Therefore, ensuring maritime
stability. and security in South East Asia is not just the concern of the littoral states.
but also that of major trading powers that depend on strategic access. to the region
for their welfare and prosperity. India as a maritime power. with direct stakes in
South East Asia via control of the Andaman. and Nicobar islands is keenly interested
in the security and stability. of the region. Territorial disputes in the South China Sea
(SCS) over which. China claims complete sovereignty, and which has of late become.
a focal point of Beijing's military assertiveness is raising concerns among. littoral
states including Malaysia, Philippines and Vietnam. Several episodes. of clashes and
standoffs between China and the Philippines, as well. as China and Vietnam have
raised the stakes of involvement. for regional as well as external powers. India, like
the United States, would. be averse to Chinese domination of the SCS and indeed of
ASEAN. as a whole. Individual states in ASEAN too would prefer to hedge. against
China by strengthening defence and security cooperation. with other external
powers such as India and the United States. This scenario provides the appropriate
context for a closer examination. of India-Malaysia defence relations .

20. Deepening of India-Malaysia Defence Relations. The cooperation between the

armed forces of Malaya and India can. be traced way before the colonial era. Indian
forces were involved in defending. Malaya for British during Second World War under
the Commonwealth Strategic. Reserve arrangement. Indian units historically known
to have fought in Malaya. during the Second World War include the 44th Indian
Brigade, Jat/Punjab Battalions. of the 16th Indian Brigade, the 4th and 19th
Hyderabad Battalions. and the 2nd and 5th Punjab Battalions from the 12th and 18th
Indian Brigade., 2nd Battalion Argyll and the Sutherland Highlanders and the Gurkha
Units from. the 28th Indian Brigade. It was also known that the Indian leader Subhas
Chandra. Bose was developing an army in Malaya to fight against the British. during
that era. It was the post-Cold War environment that provided the impetus. for
initiating defence cooperation between the two countries beginning in 1993 when a
memorandum. of understanding (MOU) was signed. Under the MOU, a Malaysia-India
Defence. Cooperation Meeting (MIDCOM) was established to enable. several
meetings and exchanges between high-level military personnel. on both sides. Then
Malaysian Defence Minister and current Prime Minister Najib Tun Razak signed. a
protocol with his Indian counterpart at the Langkawi International Maritime. and
Aerospace exhibition 2007. Under the protocol, India sent some 40 officers, pilots
and engineering officers to the air force base. in Gong Kedak in Malaysia's northern
state of Terengganu. Malaysia bought 18 jet fighters. from Russia in 2003, and the
first two were delivered in last May, while the Indian Air Force (IAF) has been using
the fighter jets since 2002. The IAF Training Team. deployed in Malaysia began
training Malaysian pilots on the SU-30SKM aircraft for two-and-a-half years since
February 2008 .

21. Malaysia-India Defence Cooperation. meetings at the level of Defence Secretary

are held regularly . The eighth meeting of MIDCOM was held in March 2010 and the
9th meeting of the MIDCOM. was held on 16'17 January 2012. Service Chiefs from
both countries have. regularly exchanged visits'in 2009 India's Chief of Naval Staff
visited Malaysia. while the Chief of the Royal Malaysian Air Force visited India.
MIDCOM now serves as a platform for military exchanges, provision of training by
India to Malaysian. pilots on Sukhoi fighter aircraft and navy personnel on Scorpene
submarines. Indian naval visits to Malaysian ports have increased over the years. A
new chapter. opened in 2003 when Indian naval ships INS Delhi and INS Kora
participated in the Langkawi International Maritime and Aerospace Exhibition 'LIMA-
03 in Malaysia. Defence relations and partnerships are obviously augmented by
strong and. expanding trade ties. For India, Malaysia is a prime trading and
investment partner in ASEAN and Asia given the regional entity's strategic location.
Malaysia's Minister of International. Trade and Industry Mustapha Mohamed
remarked that 'India is one of Malaysia's important trading partners. Since 1998, it
has been Malaysia's largest export. destination in South Asia. Bilateral trade
between the two countries increased more than six-fold between 2002 and last year
(2011)'.

22. The implementation of the Malaysia-India Comprehensive Economic Cooperation

Agreement (MI-CECA) on 1 July 2011 has .evidently boosted bilateral trade, with
total trade increasing by 32.7 per cent. over 2010, reaching US$12.5 billion (RM38.3
billion). Malaysia's exports also. increased substantially by 34.6 percent from US$6.5
billion in 2010 to US$9.2 billion. Indeed growing trade and commerce between the
two countries furnishes. a strong mutual incentive to protect trade routes. As a
major Asian naval. power, India has a definite stake in the security of the Straits of
Malacca through. which transit a considerable amount of Indian goods to Asia and
vice-versa. Malaysia. plays a cardinal role, along with Singapore and Indonesia, in
combating piracy. The Straits of Malacca which carries over 80% of oil supplies from
the Persian. Gulf is also critical to the security and well-being of the developed world
including. Japan. With growing economic and military strength, India's naval
diplomacy. is now being deployed to impact upon its strategic interests in South
East Asia. Malaysia along with Bangladesh, Sri Lanka, Indonesia, Singapore, and
Thailand. now participate in the MILAN naval exercises sponsored by India. MILAN is
a congregation. of navies organized by the Indian Navy biennially since 1995 in Port
Blair involving. combined exercises as well as social and professional interactions.
Yet, Malaysia. and Indian perspectives on the security of the Straits may not. be
wholly congruent. Malaysia's standpoint is that the Straits of Malacca should be free.
from external powers' involvement and that it is the responsibility of the littoral.
States to defend the sovereignty of the Strait of Malacca.
23. Indian naval ships regularly make. port calls in Malaysia; in March and May 2011
the ICGS Sankalp and the INS Ranvijay visited. Port Klang and Kota Kinabalu
respectively, and in August the INS Airawat and the 1st Training Squadron of the
Indian Navy (INS Tir, INS. Krishna and ICGS Veera) made port calls at Port Klang.
India is also. participating in the Cooperative Mechanism on the Straits of Malacca
and Singapore (SOMS) and. contributed to two of the six IMO Projects (Project 1 and
Project 4) for. enhancement of navigational safety and environmental protection in
the Straits. These activities are clear evidence of an evolving Indian strategic
doctrine to be engaged. in South East Asian affairs in a manner that advances the
mutual. interests of both parties. In the last few years itself, numerous high level
visits have been exchanged. between the two countries. India's Defence Minister A.
K. Antony's visit to Malaysia in January 2008 helped expand the scope of defence.
cooperation. His visit was closely followed by the official visits of the Indian
Chairman of Staff. Committee, Chief of Army Staff and Chief of Air Staff to Malaysia.
and from Malaysia, the Chief of Air Staff and Chief of Defence Forces to India.
Recently the Chief of Air Staff. India visited Malaysia on an official visit in February
2012 and Chief of Army and Chief of Navy, Malaysia made official visits to India in
April 2012 .

24. Malaysia also looks at India as an. important place for military education. The
Indian Military Academy has hosted the Royal. Malaysia Army officers and personnel
for both long and short courses. By 1997, there were some 55 officers who had
received training and attended courses. in India. However, things have changed in
the last ten years. In fact, by 2002, Malaysia. realized the importance of deepening
defence ties with India. Of course, terrorism. in the regional environment had an
impact too. Taking into account. the various scenarios and factors, Malaysian
military personnel sent to India for training. and educational courses has reached
beyond 100 in recent years. It is also important. to note that some of the officers
who attended courses in the highest Indian military. academies had been made
generals. It is also no surprise that some of the chiefs. of the services had attended
military schools in India. This shows the defence. cooperation between the two
nations. India too sent military officers for training. and education to Malaysia. The
Malaysian Armed Forces Staff College (MAFSC) . has been receiving Indian officers of
the rank of Major, attending the staff college programme and also a postgraduate
diploma in Strategic. and Defence Studies . The Malaysia Defence College is
gradually opening up to foreigners. Indians have also been invited to various
important conferences. and short courses held in Malaysia. The country is currently
developing. a reputation to host several key training-related events and conferences
for the Asia-Pacific. region in areas like peacekeeping, intelligence and terrorism.
For instance., India was invited to attend the international peacekeeping seminar
held. in Kuala Lumpur in January 2001. Malaysia has its own Peacekeeping. Training
School in Port Dickson.

25. India's Role in Malaysia's Defence Modernization. India's role in Malaysia's

defence modernization can. be expected to increase especially after the visit to
India by the current Malaysian Prime. Minister Najib Tun Razak in 2010. Malaysia has
requested industrial cooperation with Hindustan Aeronautics Limited (HAL) given
India's growing technological base. and military sophistication over the past decade.
As of now, more than 100 technical maintenance crew from Malaysia have visited
India for training at HAL for maintenance. of Sukhoi 30 MKM aircraft. India had
already dispatched a team of four instructor. pilots, one weapons systems officer,
two engineers, 22 technicians and two administrative servicemen for pilot training of
Malaysian air force officers. at Gong Kedak airbase in Malaysia for two and half
years ending July 2010. India's experience in licensed production and better
indigenous capability in missiles. and communication systems are twin factors
conducing to strong bilateral military cooperation, given also that Malaysia has
purchased a sizable amount of Russian. military hardware. India's familiarity with
Russian military technology provides added incentive to expand the defence
relationship to broader issues of mutual concern. such as maritime security in South
East Asia.

26. One potentially fruitful area of bilateral. cooperation is in the Malaysian defence
technology sector. The Malaysian. government is developing the Malaysian Defence
and Security Technology. Park (MDSTP) in the expectation that it will attract over
USD5 billion (RM15 billion) in investments over the next 12 years beginning in
December 2012. It is a public-private. partnership between the Ministry of Defence
and a local company, Master plan. Consulting Sdn Bhd and would comprise three
phases and cost RM1.4 billion. The park, which is located in Sungkai, Perak is about
75 miles north of. Kuala Lumpur. India will be able to participate in any or all of the
three phases of. development outlined by Ministry of Defence, the first phase
involving the construction. of the main building, research
and development centers, commercial centers and. the development of a university;
the second phase spanning four years will. focus on providing industrial areas and
logistics centers for small and medium. industries; and the third phase, which will
take three years, will witness the. construction of centers for specific industries.
According to Malaysia's Defence. Minister Ahmad Zahid Hamidi, the MDSTP will be
the first of its kind in the ASEAN. region, turning Malaysia into a regional hub for the
industry and creating. opportunities that will contribute significantly to the
prosperity and growth of. the country . He added: 'With the Malaysian Defence and
Security Technology. Park we are seeking to propel Malaysia into an innovation-led
economy, by hosting. the most advanced and fully integrated centre for research and
development., producing innovative defence industry related products'. Malaysia has
invited. companies from Europe, North America, Korea, Australia and New Zealand to
participate. in developing Malaysia's defence technology sector. In this regard, India
which. is also advanced in defence technology can contribute to Malaysia's goal
under the Economic Transformation Programme (ETP) of improving Malaysia's own.
defence production capabilities. India will also be able to support Malaysia's desire.
to capture a larger share of the growing and lucrative maintenance, repair. and
overhaul market (MRO) and to develop its potential as a one stop MRO centre. in
South East Asia'an objective being pursued under the country's Economic.
Transformation Programme launched by Prime Minister Najib Tun Razk. on 21
September 2010 to turn Malaysia into a high income economy by 2020. However, it
should also be noted that India will face strong competition for bids in. the Malaysian
defence sector from Malaysia's erstwhile partners such as the UK, U.S., Italy and
France, all of whom have had a longer history of selling defence-related. equipment
to the country.

27. India, Malaysia and the South China Sea. One major area of security convergence
between India and Malaysia is the. prevention of outbreak of conflict over territorial
claims in the SCS. The presence. of a large number of regional and extra-regional
navies in the SCS area could well. lead to misperception of intentions and thereby
trigger clashes that. could result in major conflict. This maritime zone is very rich in
animate and. inanimate resources, and can well provide the temptation for rising
industrial. powers such as China and India whose energy demands are expanding
rapidly to. meet national requirements. The area is home to strategic waterways that
provide. critical supply lines to the major maritime powers such as USA, Japan, India
(besides China) who see themselves as legitimate stakeholders that have a role. to
maintain peace and security in the region. Rising Asian oil demand, as well. as
Japan's oil needs, will need to be imported from the Middle East and Africa, and to
pass through the strategic Straits of Malacca into the SCS. Countries in the. Asia-
Pacific region depend on seaborne trade to fuel their economic growth, and this has
led to transformation of the SCS into one of the world's busiest shipping. lanes. Over
half of the world's merchant fleet (by tonnage) sails through. the SCS every year. The
economic potential and geopolitical importance of the SCS region has triggered
rivalry and competition for its resources especially. oil and gas. There is a high risk
of conflict in the SCS.

28. China, Taiwan, Vietnam, Malaysia, Brunei, and the Philippines have competing
territorial and. jurisdictional claims. Recent clashes between China and the
Philippines and between China and. Vietnam in the context of Beijing's military
assertion in support of sovereignty claims in that region are also raising the
concerns in ASEAN capitals as well as India and the United States. Freedom of
navigation in the region is also a contentious issue, especially between the United
States and China over the right of US military vessels to operate in China's two-
hundred-mile exclusive economic zone (EEZ). The inception of the 5-nation joint
military/ naval exercises (Malabar 2007) involving the United States, India, Japan,
Australia and Singapore in the Asia-Pacific region cannot but be viewed in the
context of deterrence given the rising military power of China and its desire to use
force, if necessary, to protect what it claims to be its inalienable national interests
in the South China Sea. The exercises focused on non-conventional maritime
operations including anti-piracy operations, search and rescue, humanitarian
assistance, disaster relief, and counter-terrorism. Significantly, their deterrent value
was underscored by the inclusion of anti-submarine operations, maritime
interdiction, and aerial combat exercises as well. A month prior to Malabar 2007, the
Shanghai Cooperation Organization, spearheaded primarily by China and Russia,
conducted a six-nation war game'it's largest to date. In light of these developments,
Malaysia and India have a common interest in encouraging dialogue and cooperation
among all parties that have a stake in this region. Malaysia's approach towards the
South China Sea, the Spratlys and other islands is to jointly exploit the natural
resources with regional states and external partners and to stabilize the disputed
area with a view to avoiding any possible clashes or confrontations that can
undermine regional security and threaten a relatively stable environment built over
four decades of ASEAN cooperation.

29. India, Malaysia and Political/Security Dialogues in a Regional Context. Defence

relations on a bilateral level are also impacted by defence cooperation and security
dialogues at the multilateral level. Indian naval expansion in the 1990s, which
aroused some concern in ASEAN, began to be viewed more positively only after the
commencement. of some joint naval exercises with South East Asian countries.
Following India's admission. as a Sectoral Dialogue Partner in 1992, full dialogue
partner in 1995 and a member. of the ASEAN Regional Forum (ARF) in 1996, the
momentum for enhanced. cooperation in several fields was firmly established. As
Malaysia has been. firmly committed to ASEAN regionalism, bilateral relations
improved as India. began full participation in ASEAN-led institutions such as the
ASEAN Post-Ministerial Conference with Dialogue Partners, ARF, in the annual
ASEAN Plus. Three meetings since 2002, and in the annual East Asia Summit (EAS)
since. 2005. India's accession to ASEAN's Treaty of Amity and Cooperation (TAC) . in
2003 provided additional impetus for Malaysia to explore further avenues. of defence
and security cooperation with a rising Asian power whose military. strength could be
deployed in South East Asia to ensure a "balance of forces" Indeed, the warming
Malaysia-India relationship fitted neatly into Malaysia's. foreign policy of practicing
"equidistance" in relations with all major external powers .

30. The first India-Malaysia Strategic. Dialogue, which was held in Delhi in April
2007, set the stage for further and more substantive. discussions on specific aspects
of bilateral cooperation as well as adopting common positions on regional security.
The 2nd India-Malaysia Dialogue. took place in Kuala Lumpur from 27-29 January
2010, while the 3rd Dialogue. was held in Delhi from 12-13 April 2012. These
discussions involving both the first track and. second track representatives are
essentially confidence-building measures. for influencing policy directions on both
sides to accelerate cooperation in key. areas including defence and security.
Exploration of appropriate. mechanisms to enhance bilateral and multilateral
cooperation in defence matters now includes. both countries' participation in the
ASEAN Defence Ministers Meeting (ADMM) and the ASEAN Defence Ministers
Meeting. Plus (ADMM+). The latter framework now includes participation by external
powers Russia and the United States. besides the ASEAN+3 (the ten ASEAN states
plus China, Japan. and South Korea). The ADMM which has met four times since
2006 before broadening into. the ADMM+ formulation in 2010 is clearly a post-9/11
invention to address. new challenges and opportunities in Asian defence
cooperation.

31. India and Malaysia have a common. interest in cooperation on the less
controversial and less sensitive issues that. fall within the ambit of Non-Traditional
Security (NTS). Issues that have supported a broader. convergence of bilateral
security perspectives are disaster relief. and humanitarian assistance. For Malaysia
as for India, the ADMM+ Concept. and Framework clearly indicates that threat
perceptions are less important while potentials. for cooperation are being steadily
explored, including in defence and security. matters. In combination with other
complementary political/security dialogues. such as ARF and EAS, the ADMM+ can
play a pivotal role for intensification. and institutionalization of political, economic
and security processes in many. areas of NTS, especially disaster relief, pandemics,
humanitarian assistance, climate. change, peacekeeping operations, piracy.