Growing export opportunities in Malaysia

Indo-Malaysia trade: There is a huge potential awaiting to be tapped

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Anand Choudhary | 13 Mar, 2008
India-Malaysia trade relations have expanded significantly since 1991 so much so, that currently, India is Malaysia's largest trading partner while Malaysia is India's second largest trading partner in the Association of South East Asian Nations (ASEAN).

From India's perspective, the following companies have established their operations in Malaysia.

61 joint ventures in sectors ranging from palm oil refining, power, railways, civil construction, training and information technology.
67 Indian IT companies enjoy Multimedia Super Corridor (MSC) status in Malaysia.
There are about 20 other companies in various manufacturing sectors in Malaysia.

The following estimates can be drawn in favour of trade between India and Malaysia:

In 2006, India-Malaysia trade reached a record US $ 6.58 billion, registering a growth of approximately 22.84% over the previous year and ten times the amount that existed fourteen yeas ago.
Malaysia has traditionally enjoyed a handsome surplus, of between US $ 1 billion to US $ 1.5 billion, in its trade with India.
Trade between India and Malaysia has expanded steadily from US $ 0.6 million in 1992 to US $ 4.3 billion in 2004, US $ 5.1 billion in 2005 and US $ 6.58 billion in 2006.
India's exports have increased by 98 % from US $ 672.5 million in 2003 and US $ 1.3 billion in 2004.

India's export basket to Malaysia is large and diversified consisting of meat and meat preparations, sugar, rice (other than basmati), wheat, fresh vegetables and fruits, cotton yarn, RMG cotton and accessories, primary and semi-finished iron, made-ups, fabrics, machinery and instruments, electronic goods and metal manufactures.

Malaysia's major exports to India during 2006 were Crude Petroleum, Palm Oil, Electronic & Electrical products, Chemicals & Chemical products and Petroleum products.

Though balance of trade has favoured Malaysia, primarily because India imports expensive commodities from the former like palm oil and petroleum on a large scale the India Malaysia trade is benefiting both nations.

According to the data of 2006/2007: Indian exports to Malaysia account for Rs 57,177,928.00. Whereas India imports goods worth Rs 84,050,632.00.

Coming back to exploring new export opportunities, Malaysia has much to offer India in the manufactured exports and services sector. For manufactured exports, there is demand in areas such as petroleum, textiles, leather, food, beverages, tobacco, chemicals, rubber plastics and transport equipment.

In the services sector, opportunities exist in the construction and consultancy services franchising and professional services such as engineering, finance, and accounting services.

According to Mr. Subash Bose Pillai, Minister Counsellor (Economic Affairs), "The strong economic and trade ties between the two nations built over a period of time offers immense opportunities to the Indian exporters for export and expansion of trade in Malaysia".