Kuala Lumpur: Prime Minister Manmohan Singh said Wednesday there were “enormous possibilities” to work with China, playing down simmering tensions between the giant Asian neighbours.
“Are India and China in competition? I sincerely believe that there are enormous possibilities of our two countries to work together,” Singh told a gathering of business leaders in Malaysia’s administrative capital, Putrajaya.
“I look upon the world as a large enough place to accommodate the growth and ambitions of both India and China and it is in that sense that we approach India-China relations,” he said.
The premier is on a three-day visit to Malaysia, after a trip to Japan where New Delhi agreed to provide a stable supply of rare earth minerals to Tokyo amid a diplomatic row between China and Japan.
Japan’s relations with China hit rock bottom in a row following Japan’s arrest of a Chinese trawlerman last month in disputed waters.
Beijing reacted angrily to the arrest, cancelling all high level talks and civilian programmes as well as suspending exports of rare earth minerals crucial for Japan’s high-tech industries.
India- Malaysia FTA ‘to double trade by 2015’
An India-Malaysia free trade deal is expected to almost double trade by 2015, allowing them to reduce dependence on traditional growth engines such as China and the United States.
The trade agreement will be signed by 31 January and come into force by 1 July.
“When the agreement comes into force, $15 billion in trade can be reached by 2015, if not earlier,” Malaysian prime minister Najib Razak told reporters after meeting Indian Premier Manmohan Singh.
The two countries said they would work together to develop the hydrocarbons and renewable energy industries and collaborate in banking and information technology.
Malaysia is India’s 19th largest trade partner, with exports and imports totalling about $8 billion in 2009-2010. India is Malaysia’s 12th largest trading partner.
The United Arab Emirates is India’s biggest trade partner, followed by China and the US.
Malaysia and India began free trade talks deal in February 2008 but negotiations were put on hold after two rounds to focus on the Asean-India Trade in Goods Agreement.
Singh said India would study Malaysia’s Islamic banking industry as it explores the possibility of developing its market.
“There have been from time to time demands that we should experiment with Islamic banking and I would certainly recommend to Reserve Bank of India to look at what’s happening to Malaysia in this record,” he said.
PM invites Malaysian firms
With India poised to focus on infrastructure development in a massive way, Singh has invited Malaysian companies to look at the “new” and “excellent opportunities” with a promise of making the FDI procedures “simple” and “predictable”.
Singh hailed Malaysian companies particularly in the infrastructure sector for their good reputation and asked them “to take a long term and strategic view” of the Indian economy and market.
He noted that India has already liberalised FDI regime and wanted to ensure a policy framework that is “transparent, predictable, simple and reduces regulatory burden”.
In an interview to Malaysian newspaper the New Strait Times ahead of his official visit here, Singh said, “I agree with you that infrastructure is an impediment and we are full conscious of this. We have announced a massive spending programme for infrastructure development.”
He said he recognised that this cannot be done by the government alone because the resources required are huge, apparently referring to plans to spend $1trillion for development of infrastructure.
Pointing out that the investments in the infrastructure sector would have to be supplemented by the private sector, he said his government was making efforts to improve the terms and conditions on which public-private partnership projects are awarded to ensure that the process is transparent, bidding is competitive and at the same time public interest is adequately safeguarded.
Seeking participation of Malaysian companies, Singh said that the sustained growth of the Indian economy and significant new demands in the infrastructure sector present an excellent opportunity for Malaysian companies in the coming years. “We welcome investments by Malaysian businesses.”