Putrajaya: India and Malaysia on Wednesday announced the conclusion of negotiations on a trade-opening agreement aimed at more than doubling bilateral commercial engagement in the next 5-year.
After the meeting of Prime Minister Manmohan Singh and his Malaysian counterpart, Mohd. Najib Tun Abdul Razak, the two sides have agreed to sign the Comprehensive Economic Cooperation Agreement (CECA) by 31 January and implement it by 1 July, 2011.
With implementation of the CECA, India will eliminate or drastically reduce import duty on products covered in about 1,200 tariff lines -- ranging from machinery and textiles to iron and steel.
Malaysia will also give about 850 Indian product lines access to its market either without duty or at a reduced rate.
India-Malaysia bilateral trade stood at $7 billion in the 2009-10 financial year. Razak said the two countries have set a trade target of $15 billion for 2015 and expressed confidence that the CECA will help achieve this.
“The two leaders affirmed their commitment to further strengthen bilateral trade and investment cooperation and deepen their economic engagement as the core of the strategic partnership,” a Joint Statement on the framework for the India-Malaysia Strategic Partnership said here.
The conclusion of India’s CECA with Malaysia comes on the heels of a similar pact with Japan, which was announced on 25 October during the first leg of the Indian Prime Minister’s visit to Japan, Malaysia and Vietnam.
Earlier this year, India inked trade opening pacts with the 10-nation Asean bloc and South Korea.
The CECA with Malaysia is over-and-above the separate free trade pact between India and ASEAN countries. In other words, the two countries will open up their bilateral trade a degree higher than what is provided for in the India-Asean FTA on goods.
Besides the CECA, both sides will also explore the possibility of enhancing cooperation in the financial sector through other measures, including participation in each others’ capital markets.
The Malaysian side also agreed to give commercial banking licences to Indian banks, the statement said.