India-Malaysia Relations

India-Malaysia has traditionally been close and friendly. Read here to know about the recent developments in bilateral relations.

India established diplomatic relations with the Federation of Malaya (predecessor state of Malaysia) in 1957.

India-Malaysia cooperation also has its regional and international dimensions. Both are the common member of various fora such as the NAM, the G-15, the G-77, the Commonwealth, the WTO, ASEAN Regional Forum (ARF), the East Asia Summit, and the Indian Ocean Rim-Association for Regional Cooperation (IORAC).

India-Malaysia Defence & Security Cooperation

India-Malaysia defence relations have steadily grown over the years. An MOU on Defence Cooperation was signed in 1993.

The current meeting highlighted the areas in which Indian defence industries could assist Malaysia. India invited senior officers from Malaysia to India to get a first-hand experience of the facilities and products of the Indian defence industry.

• Malaysia expressed the need for inducting women personnel into peacekeeping missions.
• Both countries agreed to upgrade their capability for Humanitarian Assistance and Disaster Relief (HADR) operations.
• The talks discussed ways to further enhance defence cooperation under the existing Malaysia-India Defence Cooperation Meeting (MIDCOM) framework.

Also, joint military exercises “Harimau Shakti” are held annually between the two countries.

Economic and Commercial Cooperation

Economic and commercial relations are emerging as the mainstay of the bilateral relationship. Malaysia is the third-largest trading partner for India within ASEAN, and India is the largest trading partner for Malaysia among the countries of the South, excluding China.

With the coming into the force of the India-Malaysia Comprehensive Economic Cooperation Agreement (CECA) on 1 July 2011 the bilateral economic engagement has seen more growth.

Palm oil is the main export to India from Malaysia followed by mineral fuel and electronics goods. India’s main exports to Malaysia are transport machinery, food items like meat, non-basmati rice, and sugar.

Department of Promotion of Industry and Internal Trade (DPIIT) mentions the following:

• Malaysia is the 24th largest investor in India.
• Between April 2000 and March 2019; the FDI inflow from Malaysia stood at 932.29 million USD. It constitutes 0.22 per cent of the total FDI inflows.
• The investment from Malaysia is driven towards sectors like infrastructure and construction.

As per the Ministry of Internal Trade and Industry (Malaysia); Indian investments in the country created 27042 jobs in Malaysia as of December 2018. The Indian companies have invested in 258 approved manufacturing projects in Malaysia.

Cultural Cooperation

The name of the ICCR’s Indian Culture Centre which is located in Kuala Lumpur is Netaji Subhash Chandra Bose which was established in 2010. Classes in Carnatic Vocal, Kathak dance, Yoga, Hindi language, and Tabla are undertaken by the faculties coming from both nations.

As a part of India’s Pravasi Bhartiya Divas (PBD), Malaysia sent the largest contingent of around 527. As of December 2020, there are six Pravasi Bharatiya Divas Awardees, hailing from Malaysia.

Research, Science, and Technology Cooperation

Indo-Malaysian cooperation is also growing in the area of science and technology. Both countries signed an agreement in 1998 on S&T cooperation in the specific areas of biotechnology, IT, advanced manufacturing systems, and advanced materials.

India-Malaysia signed an MoU on cooperation in the field of Traditional Medicine in October 2010.

The Government of Malaysia has been working to popularize AYUSH (Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homoeopathy) systems in Malaysia.

Recent developments in India-Malaysia relations

In 2020, Malaysian Prime Minister Mahathir Mohamad spoke in opposition to the revocation of Kashmir’s special status and the passing of the Citizenship Amendment Act.

India had then banned palm oil imports from Malaysia leading to a fall of 50 per cent (2019 – 1.1 million tonnes) from January to February 2020.

Later, the curb was lifted following the formation of a new government in Kuala Lumpur.

India-Malaysia relations in news

• Indian and Malaysian Defence Ministers recently interacted to deepen Defence Cooperation between the two countries.
• The Malaysian air force has been looking for 18 new light fighter jets with several nations, including South Korea, Pakistan, China, and Sweden, making a pitch. The Indian offer is for the LCA Mk1A version.
• India has offered a dual package for the indigenous fighter jets as well as maintenance of the Russian-origin Su30 MKM aircraft being operated by Malaysia.

Consolidating the Comprehensive Strategic Partnership (CSP)

During the recent (2026) Official Visit, India and Malaysia reaffirmed their commitment to deepen cooperation under the Comprehensive Strategic Partnership (CSP) framework, which was formally established in August 2024.

The Joint Statement underscores shared priorities of regional stability, economic integration, technological collaboration, and rule-based maritime order, reflecting the growing strategic convergence between the two Indo-Pacific partners.

1. Strategic & Defence Cooperation

Defence ties have emerged as a key pillar of the CSP.

Institutional Mechanisms:

• Strategic Affairs Working Group (SAWG) established to enhance structured security dialogue.
• Creation of a Su-30 Forum, enabling cooperation between the Indian Air Force and Royal Malaysian Air Force on:

• • Maintenance

  • Technical expertise

  • Supply-chain resilience
    This is significant as both countries operate Su-30 aircraft, allowing synergy in logistics and cost optimisation.

Military Exercises

• Conducted the 5th edition of Exercise Harimau Shakti, strengthening interoperability and counter-terror cooperation.

Counter-Terrorism

• Both sides reiterated zero tolerance for terrorism.
• Called for coordinated global efforts against terror financing and safe havens.

Significance: Defence engagement enhances maritime security in the Malacca Strait region—critical for India’s energy and trade routes.

2. Energy, Climate & Technology Cooperation

Renewable Energy & Climate Action

• Malaysian companies are expanding investments in:

  • Solar energy

  • Green hydrogen

• Shared commitment to achieving net-zero emissions.

Semiconductor Cooperation

• Collaboration in:

  • Workforce development

  • Supply-chain resilience

  • Institutional partnerships

Given global semiconductor supply disruptions, this partnership strengthens India’s ambition to become a semiconductor manufacturing hub while leveraging Malaysia’s established electronics ecosystem.

3. Trade & Investment Cooperation

India and Malaysia emphasized a balanced and diversified trade relationship.

Priority Sectors

• Semiconductors
• Digital economy
• Advanced manufacturing
• Resilient supply chains

Local Currency Settlement

• Encouragement of INR-MYR settlement mechanisms via cooperation between:

  • Reserve Bank of India (RBI)

  • Bank Negara Malaysia

This reduces dependence on third-party currencies, enhances trade efficiency, and strengthens financial sovereignty.

4. Food Security & Agriculture

Malaysia reaffirmed its commitment as a reliable supplier of palm oil, crucial for India’s edible oil demand.

Cooperation areas include:

• Oil palm value chain development
• Downstream and value-added products

Malaysia also expressed support for India-led initiatives like the Coalition for Disaster Resilient Infrastructure (CDRI).

5. Regional & Multilateral Cooperation

The Joint Statement highlights strong alignment on global governance and Indo-Pacific stability.

Global Governance

• Support for UN reforms
• Endorsement of India’s permanent membership in a reformed UNSC

Indo-Pacific & ASEAN

• Reaffirmation of:

  • ASEAN Centrality

  • ASEAN Outlook on the Indo-Pacific (AOIP)

  • India’s Indo-Pacific Oceans Initiative (IPOI)

Maritime Order

• Reaffirmation of UNCLOS 1982
• Commitment to freedom of navigation and overflight

This reflects a shared vision for a rules-based maritime order in the South China Sea and wider Indo-Pacific region.

Way forward

The historical ties of India and Malaysia lead to about 7% of Malaysia’s population being of Indian origin, which is significant for India’s foreign policy.

Malaysia is also a key pillar of India’s Act East policy and critical to India’s maritime connectivity strategies.

• It is surrounded by crucial sea lines of transport like the strait of Malacca and the south china sea.