Malaysia, India move to rebalance trade, review FTA

NEW DELHI: Malaysia and India are set to review their trade framework over the next three to six months, with both sides seeking to create a more balanced flow of goods and expand two-way trade.

Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said the issue of Malaysia's trade surplus with India was a key topic during his meeting with India's trade minister here.

He said India had stressed the importance of a more balanced trading relationship, particularly as Malaysia currently records a sizeable trade surplus with the country.

The minister emphasised the importance of maintaining a proper trade balance as a nation trading with India.

"At the moment, we have a fairly large surplus with India, while what concerns them even more is that the combined trade surplus of Asean countries has reached RM42 billion," Johari told the New Straits Times.

In 2025, Malaysia recorded a trade surplus of RM25.37 billion with India, with total bilateral trade reaching RM79.33 billion, a 5.0 per cent decline from RM83.5 billion (US$18.25 billion) in 2024.

Johari said Malaysia should use India's vast consumer market of about 1.4 billion to 1.5 billion people to expand trade in both directions, rather than focusing solely on exports.

With Malaysia's population of about 34 million, he said there was significant scope for Malaysian businesses to tap India's huge market while also increasing imports, investments and commercial partnerships between the two countries.

He said Malaysia was also looking at ways to strengthen trade between Asean and India, alongside efforts to enhance the bilateral trade framework between Malaysia and India.

"India's trade minister is very keen to explore this over the next three to six months, how we can review the Free Trade Agreement (FTA) so that both countries can leverage each other's markets and expand trade," he said.

Johari said the discussions formed part of Malaysia's broader strategy to diversify its trading partners, particularly as global trade patterns continue to change.

"We cannot only trade with one or two countries. We want to trade with all countries, especially those with huge populations."

He said expanding into large markets would give Malaysian companies more opportunities to grow while helping the country spread its trade across a wider range of partners.

Johari said his three-day visit to India had also opened opportunities for closer cooperation in areas including the automotive industry and palm oil, alongside broader efforts to strengthen bilateral trade and investment.

He said Malaysia's objective was not simply to increase exports to India but to build a more balanced trading relationship that creates opportunities for businesses in both countries.

"As a small nation, we want to see how we can work together with India, which has a huge population, and create a win-win situation between both nations instead of a one-way relationship," he said.