CELEBRATING 60 YEARS OF TIES
Malaysia and India have cooperated to boost each other’s economy, businesses
IT is a good time to do business in Asia. The rise of United States-led protectionism tendencies is likely to encourage proponents of free trade and investment in the region to get more innovative about exploring win-win strategies. Because the bigger threat in a world dealt with a bad hand of cards in the form of anti-globalism amidst slowing growth is the lack of innovation.
In contrast to US President Donald Trump’s zero-sum vision of the global economy, countries in Asia have had a long history of open trade regimes. Now, more critical than ever is the pursuit of uncharted territory between allies to unlock further gains.
In this regard, Malaysia and India, with their long history of diplomatic ties, hold untapped areas of synergy. It is not just an opportune time to take advantage of pro-investment policies for bilateral initiatives, but also to explore collaborative efforts off the beaten tracks.
Just as India presents vast potential for foreign investors seeking access to Asia’s third largest economy and a gateway to South Asia, Malaysia is ideal for global businesses looking for alternative sources of funds. And between Malaysia and India, there exist opportunities in the areas of finance and infrastructure. The question is: are we visionary enough to bring them to life?
Since India’s Prime Minister Narendra Modi took office, he has made attracting foreign investments one of his priorities. Key to his inclusive vision is the country’s infrastructure development, which will lend support to the government’s flagship “Make in India” programme to transform the nation into a global manufacturing hub. Central to this plan is the infusion of global funds.
Malaysia, with its world-class infrastructure, has expertise that India can leverage to further improve its physical connectivity. While Malaysian participation in India’s infrastructure development has focused on the roads sector, India’s “Smart Cities” initiative and its ambitious renewable energy targets have made urban renewable and power projects particularly attractive for Malaysia’s engineering and construction companies.
But, more importantly, Malaysia can also provide a deep capital market for Indian companies’ offshore financial needs for infrastructure development. As part of its modernisation plan, India estimates that it will need more than US$1.5 trillion (RM6.7 trillion) to plug the nation’s infrastructure gap over the next decade. Increasingly, public private partnerships will play a crucial role in bridging the deficit.
As Indian companies seek to diversify their investor base and funding sources, Malaysia offers an alternative in its conventional and Islamic ringgit-denominated bonds. Given the two countries’ longstanding ties derived from cultural similarities, bilateral trade and investment, and infrastructure cooperation, Malaysian investors’ familiarity with Indian credits makes them ready investors. In addition, Malaysia’s experience in Islamic finance will also enable it to share best practices with any country interested to explore the space.
An improved infrastructure network will enable India to strengthen its logistics sector by increasing connectivity between key industrial hubs. In turn, greater and better physical connectivity in India will also provide Malaysia’s companies doing business there with a more conducive environment to operate in.
As Malaysia and India celebrate 60 years of diplomatic relations, it is never too early to reflect on how both countries can work together to shape the coming decades. Investing for the betterment of each other’s economy and businesses is really creating win-win outcomes in a world in need of a new economic paradigm.
Malaysia, with its world-class infrastructure, has expertise that India can leverage to further improve its physical connectivity.