India and Malaysia have been partnering for mutual economic growth for decades. In recent years, bilateral trade relations between the two countries have been strengthened through multiple agreements. The India-Malaysia Comprehensive Economic Cooperation Agreement (CECA) is one such agreement that was first signed in 2011 and came into effect in 2012. This agreement has played a significant role in boosting trade and investment between the two countries.
The CECA agreement covers a wide range of areas including trade in goods, services, investments, and economic cooperation. As per the agreement, Malaysia and India have agreed to reduce tariffs on various products to promote trade. Under the CECA, Malaysia has facilitated the import of Indian products such as basmati rice, automobiles, textiles, and chemicals, while India has allowed imports of palm oil and palm products from Malaysia.
The agreement has also opened up opportunities for Indian companies to invest in Malaysia’s infrastructure development, particularly in areas such as renewable energy, transportation, and information technology. The two countries are also working towards greater cooperation in the areas of science and technology, education, and tourism.
The India-Malaysia CECA has already shown significant positive results. Bilateral trade between the two countries has continued to grow, with a total trade volume of US$20.5 billion in 2019. This is an increase from US$17.2 billion in 2017. India is Malaysia’s 10th largest trading partner while Malaysia is India’s 21st largest trading partner.
However, the CECA has faced some challenges, particularly regarding the import of palm oil from Malaysia. In 2019, India imposed restrictions on the import of Malaysian palm oil in response to Malaysia’s criticism of India’s policies towards Kashmir. This led to a decline in palm oil imports from Malaysia, causing some strain in the bilateral trade relationship.
Despite this setback, both India and Malaysia have expressed interest in further strengthening their economic relationship. The two countries are currently negotiating a new and more comprehensive bilateral free trade agreement (FTA) that is expected to address some of the issues that have arisen. The new FTA would encompass not only trade in goods but also trade in services and investment.
In conclusion, the India-Malaysia CECA has played an essential role in enhancing economic relations between the two countries. This agreement has facilitated trade and investment, which has brought benefits to both nations. The proposed new FTA will further strengthen the relationship and deepen the economic cooperation between India and Malaysia. It is essential for both countries to continue to work together to overcome any challenges and realize the full potential of their partnership.