India, Malaysia sign $36 bn investment proposals

NEW DELHI: Major Indian and Malaysian companies in the oil and gas, infrastructure and engineering sectors signed investment proposals worth $36 billion on Monday, reported the international media.

Indian Minister of Commerce Nirmala Sitharaman and Prime Minister of Malaysia Najib Razak witnessed the signing of the investment proposals. The companies such as Adani Ports, Andhra Pradesh Gas Distribution Corporation and Natco Pharma signed 31 Memoranda of Understanding (MoUs) with Malaysian companies and industry bodies to facilitate investments in both the countries. The developments were part of the visit by Malaysian Prime Minister Najib Razak to India.

As of December 2016, Malaysia was the 25th largest source of investment in India, with $829 million worth of foreign direct investment (FDI). India is the ninth largest investor in Malaysia, as of 2016, with nearly $300 million worth of investments across eight manufacturing projects, Razak said at a business forum.

The prime minister also called for a speedy conclusion to the negotiations on the Regional Comprehensive Economic Partnership (RCEP) agreement, which both nations are a part of. “It is more relevant than ever before that we conclude RCEP, now that Trans-Pacific Partnership is buried.”

The RCEP is a proposed free-trade agreement (FTA) between the 10 countries of the Association of Southeast Asian Nations (Asean) and the six with which this bloc has FTAs — Australia, China, India, Japan, South Korea, and New Zealand. Negotiations, which began in 2012, were to be concluded in 2015.

While negotiations on RCEP recently broke a deadlock, India is now under pressure to update its offers on tariff reduction on goods and services trade before the next meet. At a ministerial meet held in Laos in August last year, India had made its boldest move so far by shifting its long-held stance of a three-tiered, differential levels of tariff reduction to a single one applicable to all RCEP members, subject to the provision of minimum deviations for various nations. Also, the Trans-Pacific Partnership factor continues to impact RCEP talks.

With the Trump administration in the US pulling the plug on TPP, experts had predicted that India would be able to push talks faster with nations like Japan, Australia, New Zealand, which were part of the TPP. However, officials in the know said these nations had taken a more aggressive stance.

Bilateral trade between India and Malaysia slumped nearly 25 percent to $12.79 billion in the last financial year against $16.93 billion in 2014-15. The trade balance is in favour of Malaysia. Imports from Malaysia, mostly in the form of palm oil and crude oil, dominate trade with more than $9 billion worth of incoming goods.