PM Modi Heads To Malaysia: Defence, Semi-Conductor Deals On Agenda

Prime Minister Narendra Modi is on his way to Malaysia on a two-day (7-8) visit this weekend. An official trip was on the cards ever since PM Modi skipped last year’s ASEAN summit in Kuala Lumpur attended by world leaders including US President Donald Trump.

The news that the Indian PM was skipping the ASEAN meet was first announced by Prime Minister Anwar Ibrahim even before the MEA statement. Ibrahim said that Modi was busy with Diwali celebrations at home, and would participate virtually. At that time, pundits in Delhi said that the PM wanted to avoid a face-to-face with Trump at a time when relations had hit rock bottom. That page turned with the announcement last week of an impending bilateral trade deal between India and the US.

“The historic ties between India and Malaysia have seen steadfast progress in recent years. I look forward to my discussions with Prime Minister Anwar Ibrahim, and further enhancing our Comprehensive Strategic Partnership. We will aim to deepen our defence and security ties, enhance our economic and innovation partnership, and expand our collaboration into new domains,'' Prime Minister Modi said in a statement ahead of his visit.   

This is Narendra Modi’s third visit to Malaysia, a country with which India now enjoys excellent ties. Yet there were some major blips in the recent past, following the scrapping in 2019 of Kashmir’s special status. Malaysia, then headed by former prime minister Mahathir Mohamad publicly criticised New Delhi’s action. He was also critical  of the Citizenship Amendment Act, which fast-tracked the citizenship for Hindu, Sikh, Buddhist, Jain and Christian minorities living in Afghanistan, Pakistan and  Bangladesh on grounds of religious intolerance. He had roundly condemned India’s own treatment of its Muslim minority. This led to India restricting the import of palm oil from Malaysia. But the situation cooled down once Anwar Ibrahim took over. 

In 2024, when Ibrahim was on a state visit to India, ties were elevated to a comprehensive strategic partnership underlying the importance of the relationship. Today’s visit “reflects India's strong commitment to our relations with Malaysia, a key partner in India's Act East Policy, Vision MAHASAGAR, and also the Indo-Pacific vision,’’ said P.Kumaran, secretary east in the MEA, who briefed reporters on Modi’s two-day trip to the east Asian nation.

“The visit will also provide an opportunity to enhance our engagement with the ASEAN region, given the important role of Malaysia as its founding member, and its chairmanship of ASEAN in 2025,’’he added

Semi-Conductors And Defence

Talks between the two leaders will focus on increasing two-way trade, investments, and co-operation in defence, semiconductors and digital technologies. Malaysia is a global hub for semi-conductor assembly, testing and packaging and nearly 30 per cent of its exports relate to semi-conductor and allied products. India and Malaysia are working at a multi-layered collaboration through a government to government MoU on semi-conductor  collaborations and as well as research and development in terms of setting up fabrication centres, and assembly testing centres. Private Indian companies are keen to establish joint production with leading Malaysian companies on semi-conductors. 

With improvement of political ties under Anwar Ibrahim, India is looking to sell Dornier aircraft to Malaysia. There is also talk of collaboration in upgrading and retrofitting Scorpene submarines and SU-30 aircraft that   both countries have. India hopes to supply naval platforms made in Indian shipyards.  “There is a lot of promise as far as defence cooperation is concerned. …So, those are all areas that look promising. We hope to be able to get something going in these areas,’’ Kumaran told reporters.

As these visits are also a way to advance business, a meeting of the India-Malaysia CEOs Forum is being held in Kuala Lumpur. Prime Minister Modi will meet CEOs from key sectors. Malaysia is India's third largest trading partner in ASEAN with bilateral trade around 20 billion dollars.

200 Indian companies including 61 joint ventures and three Indian Public Sector Undertakings, including those in IT, construction, and pharmaceuticals are actively operating in Malaysia.