India views its ties with Malaysia as a core element of its Act East Policy, while the Malaysian leadership has taken note of India’s geopolitical importance and the many attractions of its market Both nations share a strong commitment to multiculturalism, democracy and inclusive development.
By Rajiv Bhatia*
It’s the 60th anniversary this year of the establishment of diplomatic relations between Malaysia and India, and an apt time to take stock of ties that have been mostly in a steady state of bloom.
Malaysia is one of the prominent leaders of the Association of South East Asian Nations (ASEAN), together with Singapore, Indonesia and Thailand. All four countries enjoy multi-faceted ties with India, both in the regional and bilateral contexts, while also having a very substantial relationship with China.
The Malaysian leadership’s driving motivations in its relationship with India are: unease with China’s assertiveness in the region, realisation of India’s geopolitical importance in Asia, and the attractions of the growing Indian market. This explains why India-Malaysia relations currently are in the pink. But divergences and differences too have marked this relationship, given the two countries’ different locations, state of governance and development, and interpretations of national interest.
The Malaysian prime minister was among the four ASEAN leaders who attended the Belt Road Forum (BRF) in Beijing earlier this month. (The other leaders were from Indonesia, Philippines and Vietnam.) India pointedly declined the invitation.
Malaysia is an active participant in current negotiations for the Regional Comprehensive Economic Partnership (RCEP), which includes both China and India. At the same time, Malaysia is one of the four ASEAN countries that are part of the Trans Pacific Partnership (TPP); it is presently engaged in endeavours to ensure TPP’s survival, after President Trump ordered America’s withdrawal from it.
There is yet another significant clue about Malaysia’s regional strategy: as the Trump administration shows unwillingness to assert leadership in East Asia, Malaysia and other ASEAN members have chosen to be more conciliatory towards China on the contentious South China Sea question. The way has recently been cleared for a draft framework agreement on the Code of Conduct (COC). New Delhi seems busy deciphering the implications of this development.
Against this backdrop, the Malaysian government has been notably consistent in according priority to deepen economic, political, security and defence cooperation with India. Formally, the two nations have an “enhanced Strategic Partnership”. India views its ties with Malaysia as a core element of its Act East Policy. Both nations share a strong commitment to multiculturalism, democracy, pluralism and inclusive development.
On the diplomatic side, India and Malaysia work together to uphold the freedom of navigation and over flights in the South China Sea and elsewhere and to adhere to the UN Conference on the Law of the Sea (UNCLOS). They also display a resolute will to counter terrorism and radicalisation. In fact, India admires the Malaysian model of moderate Islam and the success of its de-radicalisation programme. The latter may have some relevance to the situation in India. This mutual understanding seems to have insulated official relations from being disturbed by the activities of Zakir Naik, an Indian Islamic preacher, currently under the scanner of Indian agencies, who was based in Malaysia for several years. Counter-terrorism cooperation and intelligence exchange seem to be on a growth path.
A series of high-level visits has nurtured political ties. Prime Minister Manmohan Singh and Prime Minister Modi visited Malaysia in 2010 and 2015 respectively. Malaysian Prime Minister Mohd Najib Tun Abdul Razak paid three visits to India – in 2010, 2012 and, most recently, from 30 March-4 April 2017. The latest visit not only showcased the close friendship and expansion of bilateral cooperation, but also indicated their future trajectory. It is worth recalling that bilateral relations used to be frayed and complex during the era of the previous prime minister, Mahathir Mohammed, whereas they have showed steady improvement since Najib came to power in 2009.
Mutual negative perceptions, which existed in the past, have diminished, but they have not disappeared altogether. The Indian side tends to view Malaysia as being too close to China, deeply sympathetic towards Pakistan, and always anxious to assert its Islamic identity under the influence of the Organisation of Islamic Cooperation (OIC). The Malaysian side seems to dwell on the disconnect between India’s commitments and delivery, the huge asymmetry of power between China and India, and the impressive success of Malaysia’s development model as compared to India’s. Nevertheless, politico-economic convergences and bonds of history, culture and the diaspora have ensured that the two nations essentially relate to each other as good partners and friends today.
Malaysia’s proximity to China notwithstanding, Kuala Lumpur prefers to keep its channels to New Delhi open. In a subtle reference to the China factor, PM Modi recently observed, “Prime Minister Najib and I are also conscious of our role and responsibility in promoting economic prosperity, freedom of navigation, and stability in the Asia-Pacific region, especially its Oceans.”
The economic dimension is undoubtedly of considerable significance. Bilateral trade has been somewhat erratic due to the global slowdown: it decreased from $16.9 billion in 2014-15 to $12.8 billion in 2015-16. The two governments want it to reach the level of $15 billion in the immediate future. Investment quantum looks healthy. Malaysian investments in India, valued at $7 billion, surpassed Indian investments in Malaysia standing at $2.5 billion by a large margin. Malaysian companies have been a force to reckon with, particularly in the infrastructure sector. According to official calculations, Malaysian companies have completed 53 highway and road projects in India so far.
The CEO Forum, held during PM Najib’s recent visit, underlined the need for fresh investment flows both ways, identifying “the knowledge deficit on the opportunities available” as a challenge to be addressed. Infrastructure, healthcare, education, SME, civil aviation and tourism were considered as key sectors for further cooperation. While Indian companies are exploring new possibilities in the railways and water treatment sectors, Malaysian corporates can certainly contribute more to road construction, power generation, airport and port development. Further, an expectation exists that the Malaysian Pension and Provident Funds may invest more in Indian infrastructure assets. There is a shared business view in both countries that economic ties would benefit from early conclusion of a balanced RCEP that encompasses trade in goods and services.
The people-to-people aspect of the relationship is also significant. A nation of 28 million, Malaysia is home to a nearly two million-strong Indian origin community that accounts for 7% of the total population. This is rated as the highest share of Indian diaspora in any East Asian country. The Malaysian PM began his recent visit from Tamil Nadu, presumably in recognition of the fact that 85% of Malaysian Indians are of Tamil origin. His taking a selfie with popular star Rajinikanth revealed a desire to cultivate the Tamil connection as the next elections approach in Malaysia. This is a country where Indian cultural products are quite popular.
Many in India’s strategic community hold the view that Malaysia, together with the other Big Three of ASEAN, needs to work towards increasing its unity and solidarity. This alone will make ASEAN’s claim to “centrality” – its pivotal, even leading, role in East Asia – credible. This centrality has been under much stress in recent years from China’s policies and actions. It is in India’s interest to strengthen ASEAN as a robust and active actor in Asian affairs. This strategic calculus provides a powerful rationale for the two countries to further enhance their mutual cooperation.
PM Najib’s portrayal of India and Malaysia as the two “examples of moderate, civilised, peaceful countries that prize education, the safety and well-being of our peoples, and the equitable and sustainable pursuit of growth” is, thus, right on the dot.
About the author:
*Rajiv Bhatia is Distinguished Fellow, Foreign Policy Studies Programme, Gateway House. He has extensive experience of diplomatic work and study in Southeast Asia.
This feature was written for Gateway House: Indian Council on Global Relations.
 The other three are: Brunei, Singapore and Vietnam.
 “China, ASEAN agree on framework for South China Sea code of conduct”, Reuters, 18 May 2017, <http://www.reuters.com/article/us-southchinasea-china-philippines-idUSKCN18E1FS>; Panda, Ankita, “China, ASEAN Come to Agreement on a Framework South China Sea Code of Conduct”, The Diplomat, 19 May 2017, <http://thediplomat.com/2017/05/china-asean-come-to-agreement-on-a-framework-south-china-sea-code-of-conduct/>
 Alatas, Sharifah Munirah, “Can India and Malaysia Continue to Be Good Friends With Zakir Naik Lurking in the Background”, The Wire, 26 April 2017, <https://thewire.in/128029/zakir-naik-india-malaysia-bilateral-relations/>
 Ministry of External Affairs, Government of India, Press Statement by Prime Minister during the State visit of Prime Minister of Malaysia to India, 1 April 2017, <http://www.mea.gov.in/Speeches-Statements.htm?dtl/28293/Press_Statement_by_Prime_Minister_during_the_State_visit_of_Prime_Minister_of_Malaysia_to_India>
 Ministry of External Affairs, Government of India, Joint Statement of the India-Malaysia CEO’s Forum, New Delhi (March 31, 2017), 1 April 2017, <http://www.mea.gov.in/bilateral-documents.htm?dtl/28294/joint+statement+of+the+india++malaysia+ceos+forum+new+delhi+march+31+2017>
 Razak, Najib, “HT Exclusive | Malaysia, India are leaders in Asia’s new emerging order: PM Najib Razak”, Hindustan Times, 31 March 2017, <http://www.hindustantimes.com/world-news/malaysia-india-are-leaders-in-asia-s-new-emerging-order-pm-najib-razak/story-hWsSeAzefjmDHuXpLY5g9N.html>