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 India’s
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 CEO’s 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 other’s
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
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