India and Malaysia Signed CECA

India and Malaysia on 27 October 2010, signed the agreement towards implementing CECA (Comprehensive Economic Cooperation Agreement) at Kuala Lumpur during the visit of Indian Prime minister Manmohan Singh to Malaysia. His visit to Malaysia was a part of his three nation tour which also included Japan and Vietnam besides Malaysia. The entire CECA with legal texts would be signed by 31 January 2011 and would be implemented on 1 July 2011.Besides CECA, India and Malaysia also signed five other pacts during the visit of Manmohan Singh, which are as following:
•    MOU(Memorandum of Understanding) on Cooperation in the Field of Traditional Systems of Medicine
•    MOU for cooperation in the field of Tourism 
•    MOU for Cooperation in the field of IT & Services
•    Agreement between CSIR of India and UNIK of Malaysia on Research and Development Collaboration 
•    Cultural Exchange Programme for 2010-13

India Malaysia CECA covers trade in goods as well as services, investment and bilateral economic cooperation in sectors like infrastructure development, creative industries, tourism, business facilitation, science and technology and human resource development. India Malaysia CECA would be more liberal than the India-ASEAN Trade in Goods (TiG) Agreement. To increase the flow of FDI (Foreign Direct Investment) into each others’ territory India and Malaysia would liberalise their markets as per CECA.

India is the second country which Malaysia has signed MoU in the field of traditional medicines. Because a large number of people of Indian origin live In Malaysia, the MoU can be advantageous for both the nations.

The MoU for cooperation in tourism will increase the number of tourists from both India and Malaysia to each other. India ranks sixth where the number of tourists visiting Malaysia is concerned while Malaysia stands 10th for inbound tourism to India.

The MoU for cooperation in IT & Services would reflect the contemporary changes taking place in the field of IT and Services.
India Malaysia MoU for cooperation in IT and Services will help in IT developing talent as well as skill in IT sector and for greater participation of Indian IT companies in Malaysia. To achieve this objective the Prime Ministers of India and Malaysia announced the setting up of a joint ICT talent Development Consultative Committee. At present there are 60 Indian IT companies working in Malaysia.

As per the Agreement between CSIR of India and UNIK of Malaysia on Research and Development Collaboration, India and Malaysia decided to set up a Joint Innovation Accelerator Centre in Malaysia to carry out research in green technology, medicinal plants and treatment of water.

Important Information
•    Malaysia is the 3rd largest trading partner of India amongst ASEAN (Association of South East Asian Nations). India- Malaysia trade increased from 3.38 billion dollars to 8.01 billion dollars in 2009-10.
•     Indian exports to Malaysia include petroleum products, metals, machinery, meat, chemicals, spices and cereals. Indian imports include petroleum products, electronic goods, edible oil, wood, chemicals and metals.
•    India established diplomatic relations with the Federation of Malaya (predecessor state of Malaysia) in 1957.
•    Based on direct investments from Malaysia to India, it is the 21st largest investor in India with cumulative FDI inflows valued at US$ 1.8 billion from January 1991 to 2008.
•    Malaysia has one of the largest communities of People of Indian Origin in the world, numbering close of 2 million (about 8% of Malaysia’s population). The overwhelming numbers are Tamil speaking.
India Malaysia CECA is a part of India’s Look East Policy (started in late Indian Prime Minister Narsimha Rao’s regime) to improve and strengthen its relations with ASEAN of which Malaysia is an important member. Although the tension between Malaysian government and HINDRAF (Hindu Right Action Force) creates some sort of suspicion in some sections of Malaysia regarding India but more or less the bilateral relationship has remained unaffected by these developments. HINDRAF espouses the cause of PIO (Persons of Indian Origin) residing in Malaysia.