India, Malaysia elevate ties following Modi-Anwar talks

NEW DELHI – India and Malaysia elevated their bilateral relationship to a Comprehensive Strategic Partnership on Aug 20 following wide-ranging talks in New Delhi between Prime Minister Narendra Modi and visiting Premier Anwar Ibrahim that touched upon defence, trade and investment.

The first visit by a Malaysian prime minister in six years comes at a time when India is looking to deepen links with South-east Asia, while Kuala Lumpur has a keen interest in tapping into the world’s fifth-largest economy.  

Following talks with Datuk Seri Anwar, Mr Modi said the visit had “given a new direction” to ties.

“Today, we have decided that our partnership will be elevated to a Comprehensive Strategic Partnership. We believe that there is still a lot of potential in economic cooperation,” added Mr Modi in a statement.

“We should increase mutual cooperation in new technological areas, such as semiconductors, fintech, defence industry, artificial intelligence and quantum. We have emphasised on accelerating the review of the Comprehensive Economic Cooperation Agreement between India and Malaysia,” he said.

Calling Mr Modi his friend in Hindi, Mr Anwar said the discussions between the two prime ministers were “no holds barred”.

“We realised that this (relationship) must be further strengthened in a multitude of areas... including military collaboration in terms of joint operations to safeguard our borders,” said Mr Anwar.

A joint statement released after the talks said: “Both sides agreed to further expand defence industry collaboration, as well as defence R&D collaboration.”

India has sought to boost defence ties with South-east Asia amid simmering border tensions with China, which also has disputes with some Asean members in the South China Sea.

India offered US$300 million (S$392 million) in credit lines to Vietnam for procuring boats and ships built in Indian dockyards during Prime Minister Pham Minh Chinh’s visit to the country from July 30 to Aug 1. And earlier this year, India started exporting BrahMos supersonic cruise missiles to the Philippines under a 2022 agreement worth US$375 million.

The joint statement noted that the two countries reiterated “their commitment to respecting freedom of navigation and overflight, and unimpeded lawful commerce, based on the principles of international law”.

Among the agreements signed during Mr Anwar’s visit was a pact for the recruitment of Indian workers by Malaysia.

The labour pact, Mr Modi said, would “promote the recruitment of workers from India as well as the protection of their interests”.

While details of the pact were not released, a senior official in the Ministry of External Affairs, Mr Jaideep Mazumdar, called it a “significant” agreement that would “ensure proper work conditions” for Indian workers and would open up sectors where Indians could work in Malaysia.

There are already about 185,000 skilled and unskilled Indian workers in Malaysia. But exploitation of workers and human trafficking from India to Malaysia are major areas of concern for both governments.

Ties between Malaysia and India – unlike New Delhi’s relations with other Asean partners such as Singapore – have not always been smooth sailing.

In 2019, ties spiralled downwards after then Prime Minister Mahathir Mohamad said that India had “invaded and occupied” Kashmir and called it “wrong”, urging New Delhi to work with Pakistan to resolve the problem of Kashmir.

The remarks went down poorly, with India subsequently putting restrictions on imports of palm oil from Malaysia.

Another contentious issue has been controversial Indian preacher Zakir Naik, who is wanted in India on charges of hate speech and money laundering. Malaysia has thus far refused to extradite the preacher.

But under the Anwar government, Kuala Lumpur has said that it will act against Naik if any evidence is given, with Malaysia keen to set ties back on track and widen the engagement with India.

In a sign of the improved ties, India on Aug 20 also announced it would export 200,000 metric tonnes of white rice to Malaysia despite an ongoing export ban. India has made an exception for other countries like Singapore as well.

The move is likely to be welcomed by Kuala Lumpur as it seeks to tamp down inflation.

Analysts said Mr Anwar’s visit would energise ties with Malaysia, which is India’s third-largest trading partner in Asean, after Singapore and Indonesia.

Bilateral trade between the two countries stood at US$20.01 billion in the financial year of April 2023 to March 2024.

“The Malaysian Prime Minister’s visit to India comes close on the heels of the Vietnamese Prime Minister’s visit and before the 21st India-Asean summit, scheduled for early October,” said Dr Monish Tourangbam, director at the Kalinga Institute of Indo-Pacific Studies.

“Therefore, from India’s point of view, stronger ties with Malaysia builds into New Delhi’s broader strategy to enhance its political, economic and security partnerships and manage China’s overarching influence in India’s extended neighbourhood of South-east Asia.”