Malaysia Seeks Balance In Trade With India - AEIC

KUALA LUMPUR, Sept 26 (Bernama) -- Malaysia has called on India to clearly identify sectors where it can expand its exports and services to help reduce trade imbalances, said ASEAN-India Economic Council (AEIC) chairman Datuk Ramesh Kodammal.

He said Malaysia understands India’s concerns over the trade deficit but stressed that the imbalance is largely due to Malaysia’s commodity exports, even though the country already imports many items and uses a wide range of services from India.

“India must come up with new ideas, and tell us what we can buy from them, so that we can balance this trade.

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“This could include pharmaceuticals, information technology (IT), the services sector, or the education sector and we can work together with them,” he told Bernama on the sidelines of the Joint Luncheon Ceremony of the ASEAN-India Business Summit 2025.

Ramesh highlighted that palm oil alone accounts for about 30 per cent of total trade between Malaysia and India, cautioning that sudden tariff hikes could disrupt exports and stressing the need for closer coordination between industry and government.

“Basically, India and Malaysia have got two agreements — one under the ASEAN-India Trade in Goods Agreement (AITIGA), which is still in the process of being reviewed, and another is the bilateral agreement with Malaysia (Malaysia-India Comprehensive Economic Cooperation Agreement).

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“We need to finalise these frameworks and then we can see how the trade balances out,” he said.

Ramesh said the AITIGA, which has been in place for more than a decade, is currently under review and is expected to be finalised by this year.

He added that Malaysia is open and proactive in global trade, with more than 16 bilateral and free trade agreements worldwide.

“I think India has no problem to increase trade with Malaysia and vice versa. In the next five years, I expect our trade to expand at least 30 to 40 per cent if these agreements come into play,” he said.

The Malaysia-India bilateral trade reached US$20.01 billion in 2023-2024.

Malaysia is India’s 16th largest trading partner and ranks as the country’s third largest trading partner in ASEAN, while India ranks among Malaysia’s top 10.

Meanwhile, India has been a leading trade partner of ASEAN, with total trade increasing to US$106.83 billion in 2024 from US$100.72 billion in 2023.

-- BERNAMA