India Eyes Deeper Ties In Semiconductors And Digital Economy With Malaysia
By Rosemarie Khoo Mohd Sani and Mikhail Raj Abdullah
KUALA LUMPUR, July 2 (Bernama) -- India is keen to deepen its already robust business linkages with Malaysia in the fast-growing semiconductor industry and digital economy.
India’s High Commissioner to Malaysia, B N Reddy, said Malaysia has long been recognised as a leader in the semiconductor sector.
Besides this, Malaysia had expressed keen interest in partnering with India in the semiconductor sector.
“We welcome more Malaysian companies to collaborate with Indian firms through joint ventures,” he told Bernama after appearing on Bernama TV’s The Nation programme on 'Malaysia-India Relations: Then, Now, Next'.
Reddy said the potential for bilateral partnership was promising, given India’s increasing focus on semiconductors through its India Semiconductor Mission (ISM), which aims to develop a domestic chip and display manufacturing ecosystem.
The mission targets chip production in the 28-nanometre to 90-nanometre range.
“It will be a significant development, as over 60 per cent of the industry falls within this range under the ISM. We aim to triple our semiconductor market size to US$109 billion by 2030, up from US$38 billion in 2023,” he said.
Currently, India has approved six major semiconductor manufacturing facilities under the initiative.
Reddy also said trade between India and Malaysia had continued to strengthen despite global economic headwinds and geopolitical uncertainties, reaching about US$20 billion (US$1 = RM4.19) in 2024.
In June 2024, India exported US$765 million to Malaysia and imported US$1.23 billion.
India’s exports to Malaysia surged by 93.9 per cent compared to the same month last year, while imports grew by 14.5 per cent.
He said the ongoing review of the ASEAN-India Trade in Goods Agreement (AITIGA), which began in 2023 and is expected to conclude by year-end, is set to further enhance regional trade and investment, particularly in the digital economy.
“One of the key objectives is to make trade more effective, user-friendly and simpler for businesses,” he said, adding that recent talks in Kuala Lumpur between an Indian delegation and Malaysia, in its role as ASEAN coordinator, marked significant progress.
India has been a full dialogue partner of ASEAN since December 1995, with the partnership elevated to summit level in 2002.
He also acknowledged several challenges to two-way trade, including persistent asymmetries in market access and issues surrounding rules of origin, which need to be addressed through the AITIGA review.
“We need to find solutions and align the agreement with evolving global trading practices,” he said.
Reddy also highlighted the potential for cooperation in digital payments, expressing hope that India’s unified payments interface could soon be accepted in Malaysia and that both countries would develop interoperable QR code networks to enable seamless cross-border transactions.
“This would greatly benefit users from both nations, including tourists, and improve digital connectivity between our economies,” he said.
As India deepens its engagement with ASEAN, its expanding trade and technology ties with Malaysia are expected to play a key role in shaping regional economic integration, Reddy said.
-- BERNAMA