Move quickly to seize India’s ‘early China’ moment, govt urged

Malaysia should move faster to tap India’s economic growth and help Malaysian companies gain a bigger foothold in the market, says an economist.

Yeah Kim Leng of Sunway University said India could become one of Malaysia’s five largest export markets within the next five to 10 years if Malaysia made a concerted effort to deepen its presence there.

Bilateral trade between the two countries hit US$18.6 billion (RM75 billion) last year, making India Malaysia’s 10th largest trading partner. Malaysian exports to India amounted to RM52.3 billion in 2025, up marginally from RM52.13 billion a year earlier.

Yeah likened India’s economic potential today to that of China from the 1980s to the 2010s — a period he refers to as “early China”, when a growing middle class led to a rise in consumer purchasing power.

China has been among Malaysia’s largest trading partners for years now. In 2025, trade between the two countries topped US$191.7 billion (RM541.9 billion). Malaysian exports to China amounted to RM188 billion, up marginally from RM187 billion the year before.

According to the World Bank, India’s economy grew 7.6% in the 2025-26 financial year, making it the fastest-growing major economy, while its population of about 1.5 billion gives businesses access to a vast and increasingly important consumer market.

Prime Minister Anwar Ibrahim is expected to meet his Indian counterpart Narendra Modi on the sidelines of the BRICS summit in New Delhi on Sept 12 and 13. He will then travel to Kerala before returning home on Sept 14.

Malaysia and India have been deepening economic ties since upgrading their relationship to a comprehensive strategic partnership in 2024.

Bilateral trade reached US$18.6 billion last year (RM75.2 billion), with Malaysia exporting US$12.2 billion (RM43.9 billion) worth of goods to India.

Yeah told FMT that the opportunities had extended beyond commodities to include semiconductors, artificial intelligence, digital finance, renewable energy and advanced manufacturing.

He said semiconductors offered one of the clearest opportunities for cooperation, with India having strengths in chip design and Malaysia an established assembly, testing and packaging industry.

Malaysian companies should therefore not try to compete with Indian firms on size, he said, but find areas where their engineering skills, technology and experience could fill gaps in India’s growing supply chains.

“The real opportunity is for Malaysian SMEs and mid-cap firms to integrate into India’s expanding supply chains as specialised component suppliers, service providers and technology partners,” he said.

Yeah also said that the success of Anwar’s visit should not be measured simply by the number of memorandums of understanding signed or the value of investment announcements.

Instead, greater attention should be paid to whether Malaysian companies actually secured and delivered contracts in India, and whether initiatives already announced moved forward, he said.

These included plans for closer semiconductor cooperation, a Malaysia-India digital council, cross-border payment links, greater use of ringgit-rupee settlements and proposed cooperation in artificial intelligence.

“The real success indicator will be whether Malaysian companies, especially SMEs, actively enter the Indian market,” Yeah said.

Universiti Malaya international relations expert Geetha Govindasamy said the stronger economic ties showed that both governments were willing to look beyond past disagreements.

These include Malaysia’s criticism of India’s handling of Kashmir and its Citizenship Amendment Act as well as the dispute over India’s request for the extradition of preacher Zakir Naik.

She said Malaysia was valuable to India as a gateway to the wider Asean market, while defence links and Malaysia’s Indian diaspora provided further scope for closer ties.

However, Geetha cautioned against expecting a major breakthrough from Anwar’s meeting with Modi, given that his main purpose in New Delhi would be to attend the BRICS summit.

She said Malaysia could nevertheless deepen its relationship with India without being seen as choosing sides in the broader competition between India and China.

“Strengthening ties with India does not signify choosing New Delhi, nor does maintaining strong relations with China imply siding with Beijing,” she added.

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