India, Malaysia to expand cooperation in digitalisation, defence manufacturing, AI

India and Malaysia on Tuesday agreed to elevate their ties to a comprehensive strategic partnership as Prime Minister Narendra Modi and his Malaysian counterpart Anwar Ibrahim discussed ways to expand cooperation to new fields such as digitalisation, defence manufacturing, semiconductors and AI.

The two sides signed eight agreements, including a crucial memorandum of understanding (MoU) on recruitment and employment conditions for Indian workers, and agreed to work on connecting India’s Unified Payments Interface (UPI) with Malaysia’s Payments Network (PayNet) for digital transactions.

“Today, we have decided that our partnership will be elevated to a comprehensive strategic partnership. We believe that there is still a lot of potential in economic cooperation. Bilateral trade and investment should be expanded,” Modi said at a media interaction after his talks with Ibrahim.

Pointing to the steady progress in bilateral trade, Modi said investments from Malaysia to India were worth $5 billion last year and the two sides had commenced trade in national currencies. “We should increase mutual cooperation in new technological areas such as semiconductors, fintech, defence industry, AI and quantum,” he said, speaking in Hindi.

Ibrahim, who referred to Modi as “mere dost” (my friend) and “my brother”, said the friendship between the two leaders had facilitated frank and “no holds barred” discussions on many matters, including sensitive issues. Both Malaysia and India are multicultural and multi-religious countries, and their commonalities extend beyond trade and investments, he said.

“Malaysia and India, from the days of Jawaharlal Nehru and Tunku Abdul Rahman, have established good relations but we realised…that this must be further strengthened in a multitude of areas which covers…digital, investments, trade, construction, modern agriculture, education, research, and all fields, including military collaboration in terms of joint operations to safeguard our borders,” Ibrahim said.

The two sides signed an MoU on the recruitment, employment and repatriation of workers, a labour pact that had been negotiated over the past few years. The agreement assumes importance following complaints about violation of rights of Indian workers in Malaysia. There are about 1,85,000 Indian nationals in Malaysia, including skilled and unskilled workers.

“Today’s agreement on employment of workers will promote the recruitment of workers from India as well as the protection of their interests,” Modi said. The two sides have also simplified visa procedures to facilitate the movement of people, he said.

The two sides also signed agreements for cooperation in digital technologies, tourism, youth affairs and sports, public administration and governance reforms, ayurveda and traditional medicine, and culture, arts and heritage.

They also decided to set up a Digital Council to facilitate cooperation in digital technology and to create a Startup Alliance. Steps will also be taken to speed up the review of the bilateral Comprehensive Economic Cooperation Agreement, while Modi called for the review of the India-Asean free trade agreement to be completed in a timely manner.

“We both have talked about new possibilities of mutual cooperation in the defence sector. We are also unanimous in the fight against terrorism and extremism,” Modi said.

Describing Malaysia as an important partner within the Asean framework and in the Indo-Pacific region, Modi added, “We are committed to freedom of navigation and overflight in accordance with international laws. We support the peaceful resolution of disputes.”

Ibrahim thanked India for considering Malaysia as “a great and true friend”, and said, “I must give you this assurance that it is reciprocal, and we will reinvigorate working relations in all fields.”