by NUR HAZIQAH A MALEK / pic by AFIF ABD HALIM
MALAYSIA-INDIA trade relations is expected to flourish further via projects within the infrastructure, construction and communications sectors that would utilise the expertise of the two nations.
HSBC Bank Malaysia Bhd multinationals global banking head Shreyas Krishna said tie-ups between the two countries have been experiencing greater growth with exchanges of expertise particularly in infrastructure and information and communication technology (ICT) sectors.
“The other sectors which we feel are progressing upwards are the pharmaceutical and biotechnology, especially when you notice the upcoming biotechnology parks to be developed,” he said at the IndiaAsean HSBC conference in Kuala Lumpur yesterday.
He said products manufactured as a result of the tie-ups will not be exclusive to Malaysia and India, but will also be exported to other countries including the US and the European Union.
“They will be receiving certifications from developed geographies in order to distribute their products there, which means Malaysia-based manufacturers will place the nation in the heftier economies’ radar,” he said.
HSBC Malaysia global banking co-head Omar Mahmoud said the bank also sees a positive growth in foreign direct investments (FDIs) into Malaysia from India.
“We do believe that there will be further FDIs into Malaysia based on the positive statements made by the prime ministers of India and Malaysia,” he said.
The total exports value of Malaysia to India has decreased by 7% from RM32.16 billion recorded in 2015 to RM28.24 billion in the following year.
Krishna said the upcoming KL Asean-India summit in November is the deadline for the completion of regional agreements, which is expected to end the downward trend.
“The government has signed the regional comprehensive economic agreements, saying that we need to sort them out as soon as possible.”
Omar said HSBC Malaysia is working closely with the Malaysian Investment Development Authority (Mida) and InvestKL to market Malaysia as the regional hub to the rest of the world including India.
“What both Mida and InvestKL are offering is certain incentives for clients who are open towards setting up regional hubs and manufacturing facilities in the country.
“Hopefully, that would be attractive to Indian corporates hoping to penetrate into Asean countries to exploit a very rapid growth trajectory,” he said.
Malaysia has signed a total of 31 investment deals worth RM140.93 billion last year in order to boost bilateral trade and investment relations.
The investments are mainly in areas including higher learning education, port and highway constructions, as well as coconut and palm oil developments.
Meanwhile, the India-Asean economies’ ties are expected to utilise India’s edge in services sector and Asean’s manufacturing advantage in allowing greater mutual market access to increase traction.
India has committed to eliminate up to 80% of its goods tariffs for greater market access, on the way to the completion of the Regional Comprehensive Economic Partnership, a multilateral trade agreement involving Asean countries and Australia, China, India, Japan, South Korea and New Zealand.
Currently, Asean is India’s fourth-largest trading partner, comprising 10% of the country’s total trade, targeting at least RM782.94 billion in two-way trade by 2022.