Consumer Demand, Tariff Cuts To Boost Malaysia-India Trade

By Shakir Husain NEW DELHI, Aug 17 (Bernama) -- India's growing consumer market and tariff reductions will create a stronger demand for Malaysian exports, with bilateral trade having registered a multi-fold rise in the last 15 years. Malaysia-India trade jumped almost 28 per cent to US$7.11 billion (RM30.57 billion) in the first six months of 2017, according to the Ministry of International Trade and Industry (MITI). Malaysian exports to India grew 7.5 per cent to US$4.05 billion (RM17.42 billion) between January and June compared with the same period last year. (US$1 = RM4.29) With India's rising consumer base, expanding middle-class and income levels, there will be more demand for food items, furniture, personal care products and cosmetics, creating new opportunities for Malaysian exporters, said Mazlan Harun, Malaysia's Trade Commissioner in Mumbai. “The Indian economy's annual average seven per cent growth for the past three years and new business reforms had made the market of 1.3 billion people more attractive. "Apart from products, Malaysia's services providers can also explore opportunities in India, especially in the areas of construction, engineering, education, healthcare and franchising," he told Bernama. He said Malaysia External Trade Development Corporation (MATRADE), through its offices in Mumbai and Chennai, has been assisting Malaysian companies to venture into India. "We hope that more Malaysian companies would seriously look at India as a growing export market," he added. Last year India ranked as Malaysia's 10th largest trading partner and 7th largest export destination. Despite a tough global business environment, Malaysia's trade with India increased from RM46.80 billion in 2015 to RM 48.65 billion in 2016. Malaysian exports to India in 2016 were valued at RM 32.01 billion, whereas imports were at RM16.65 billion. Bilateral trade has increased nearly five-fold in 15 years and two free trade agreements are expected to drive trade volumes significantly higher over the coming years. The Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA), which came into force in July 2011, liberalises trade in goods and services through tariff reductions and promotes investments. Under the ASEAN-India Free Trade Agreement (AIFTA), which became effective in January 2010 for Malaysia and India, the two countries had eliminated import duties on thousands of products. "Malaysian exporters should fully utilise and leverage on the two FTAs. MATRADE would strongly advise Malaysian companies to visit the market regularly to meet with potential clients and participate in various trade exhibitions. “On our part, we can organise business meetings between Malaysian companies and potential importers in India," Mazlan said. Malaysia's top exports to India include palm oil, electrical and electronic products, crude petroleum, chemicals, and metal products. With India's bourgeoning youth population acquiring more purchasing power and urbanisation gatherhing pace, there will be robust demand for consumer products. India's urban population, estimated at 377 million in the 2011 census, is expected to grow to 600 million by 2030. According to a study by US investment bank Goldman Sachs last year, the expansion of "Urban Mass," will be "the key driver of India's consumption story in the coming 5-10 years." -- BERNAMA