Foreign visits by the Indian prime minister are carefully planned and curated, producing ample documentation, soaring rhetoric, striking visuals, and instant commentary. However, discerning a visit’s essence and identifying the principal outcomes of leader-level interactions requires a dispassionate analysis. Prime Minister Narendra Modi’s two-day visit to Malaysia (7-8 February) is one of those visits. It successfully highlighted the special relationship between the two countries, rooted in a long history, shared democratic values, cultural heritage, and the contributions of a vibrant Indian diaspora in Malaysia. But, in concrete terms, what has the visit achieved?
This visit had two objectives: to review the present status and to explore and advance new avenues of bilateral cooperation. Malaysian Prime Minister Anwar Ibrahim agreed, during his August 2024 state visit to India, to elevate the ‘Enhanced Strategic Partnership’ to a ‘Comprehensive Strategic Partnership’ (CSP). To achieve this, the two governments have adopted a holistic approach. This was reflected in the joint statement issued on 8 February. It is comprehensive, encompassing the relationship from political cooperation to digital, energy, education, and tourism linkages, as well as defence and security cooperation. The central focus, though, was to deepen and diversify the economic dimension. The Malaysian PM noted that “the worth of any partnership is measured in the end by the difference it makes to the lives of ordinary people.”
This is certainly needed. Trade between India and Malaysia has been somewhat limited, with trade volume of $20 billion in 2024–25. Officials and industry leaders know the potential for growth. At the government level, New Delhi has pushed for swift progress in the long-pending review of two relevant agreements: the Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA) and the ASEAN-India Trade in Goods Agreement (AITIGA). The effort is to make them valuable, “mutually beneficial, trade facilitative and relevant to current trading practices.” Two factors may help expedite the process at this moment: one, Malaysia is the ASEAN country-coordinator of the review of AITIGA; and two, India now carries more weight against the backdrop of its signing a string of Free Trade Agreements (FTAs), including the latest one with the European Union (EU), widely hailed as ‘the Mother of all trade deals’, and the Framework for the Interim Trade Agreement with the US.
The investment pillar of the economic relationship, therefore, received considerable attention. Malaysian investment in India was just $1.29 billion over the 25-year period 2000–2025, with major companies such as Petronas and Khazana as the main players. Indian companies in Malaysia, on the other hand, performed better, investing in 250 manufacturing projects totaling $2.62 billion and creating over 15,000 jobs.
This will be expanded, and the scope of investment will broaden to include advanced manufacturing, semiconductors, the digital economy, fintech start-ups, Artificial Intelligence, and other high-value sectors, in addition to infrastructure, green energy, healthcare, and hospitality. Malaysia is already becoming a premier regional destination for data centres, and the new engagement will blend well with its ambitions.
Industry sees the future profits too. The 10th Malaysia-India CEO Forum was held on 7 February, with a slew of plans on the agenda seeking government assistance on both sides. Of the ten bilateral agreements signed during the visit at the government level, at least five related to economic cooperation directly, i.e., the MOU on cooperation in combating and preventing corruption, on collaboration in the field of semiconductors, on cooperation for insurance, on vocational education and training, and on health and medicine.
Increased connectivity will certainly turn some of the plans into reality. Already, 234 flights per week operate between the two countries, and tourism is booming: during Jan-November 2025, 1.4 million Indians visited Malaysia, and 300,000 Malaysians visited India in 2025. This can be easily balanced, and business travel can be added. Located at the heart of Southeast Asia and rich in natural and cultural attractions, Malaysia has special appeal to Indians. As a founding member of ASEAN and a country with close ties to China, Malaysia is important to India’s Act East Policy. Deeper cooperation between India and Malaysia is certain to benefit both sides.
Both sides must be serious about translating their words into action, consistent with their commitment to cooperate further, especially on critical technologies. Malaysia’s established electronics ecosystem and India’s expanding market and design capabilities are “natural complements.”
An additional layer was added recently to “the special relationship” with Malaysia: its entry into BRICS as ‘a partner country’. India, as a founding member, facilitated and welcomed this development. The two nations are aligned in commitment to strengthening multilateralism and reforming international organizations, including the UN Security Council (UNSC). Malaysia supports India’s permanent membership in the reformed UNSC. The two governments have committed to promoting the use of national currencies in bilateral trade. Collaboration between NPCI International Limited (NIPL) and PayNet Malaysia to establish bilateral payment linkages is gathering momentum.
Despite the positive signals from the Modi visit, it is worth noting that Malaysia has maintained close, friendly relations with Pakistan and Türkiye. Besides, being a Muslim-majority nation, it has a deep interest in the Organization of Islamic Cooperation (OIC) agenda as well. The way it balances these relationships with the promise of optimally realizing the Comprehensive Strategic Partnership with India will be the play to watch in the coming years.
Rajiv Bhatia is the Distinguished Fellow for Foreign Policy Studies and a former ambassador.
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