Act East: India, Malaysia inch closer

Nearing three years of its tenure, the Modi government has focused on reorienting ties with East Asian countries under its “Act East” initiative, with Malaysia — a strategically and economically very important ASEAN country — having occupied a special place in the foreign policy priorities. This was evident when Prime Minister Modi visited Malaysia in 2015 and described India’s relationship with Malaysia as the ‘core’ of its “Act East Policy”.

Malaysian Prime Minister Mohd Najib Tun Abdul Razak’s six-day state visit to India from March 30 to April 4 was, therefore, a fitting occasion to take stock of the progress in the bilateral ties between India and Malaysia over the past two years and reflect upon the 60 years of diplomatic ties between the two countries. The two leaders held a detailed discussion on a wide range of issues relating to security, economic, and other interests, and signed seven important MoUs. 

Economic cooperation is undoubtedly one of the pillars on which the bilateral ties rest. Trade between the two countries increased from $0.6 billion in 1992 and peaked at $16.9 billion in 2014-15. While India is the largest trading partner for Malaysia in South Asia, Malaysia is the second largest trading partner for India within ASEAN. Malaysia has become the 23rd largest investor in India. During Najib’s visit, the two Prime Ministers expressed their aspiration to see this trade increase to $15 billion in the immediate future. This ambition is very significant in view of the fact that the trade volume fell to $12.08 billion in 2015-16 and further slipped down to $10.8 billion in 2016-17. Infrastructure development in India emerged as a special focus of the visit. Given its expertise in infrastructure development, including roads, highways, and ports, Malaysia can play an important role in promoting the Modi government’s road-building and smart cities initiatives. Since India is going to invest $1 trillion in infrastructure development, Malaysian companies have their own economic interests in exploring India’s infra sector.

At a time when Beijing’s trade with ASEAN has reached $480 billion and China is focused on expanding its economic clout in the region through a $100 billion Silk Road initiative, enhanced economic ties with Malaysia is certainly needed for India to improve its presence in ASEAN.

Defence cooperation is another major pillar of the relationship. While the signing of an MoU in 1993 has enhanced defence cooperation, the two leaders have now agreed to expand joint military exercises to the company level, and subsequently as tri-services exercises. Prime Minister Najib also announced plans to buy spare parts of the Sukhoi SU-30 aircraft from India, which in turn would help Malaysia strengthen its airpower. As the strategic location of Malaysia enables it to control the Strait of Malacca, which is one of the busiest shipping lanes in the world, and connects the main sea route between the Indian and the Pacific Ocean and the South China Sea, ensuring peace and security in this region is of great priority for both the countries. In fact, this aspect has assumed an added importance in light of China’s efforts towards converting the South China Sea into its exclusive zone. The joint statement of the two countries was precisely an oblique reference to China, which flagged respect for the freedom of navigation, sea and flight, and unimpeded lawful commerce, based on the principles of international law. The two countries will also tackle the trafficking of weapons, humans, and drugs carried out in the Strait of Malacca.  

Malaysian Prime Minister Najib’s concurrence with India that terrorism in all its forms and manifestations is a validation of India’s efforts to expose Pakistan as the breeding ground for terrorism. He stated that the fight against terrorism should not only seek to eliminate terrorists and terror organisations, but should also identify, hold accountable, and take strong measures against States hosting such terror groups. While PM Najib’s visit has set the stage for greater cooperation between the two countries, the common domestic and regional interests, and the personal chemistry between the two PMs can help take the relationship to greater heights.

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