Indian enterprise.
Global synergies.

India's Overseas Markets

Malaysia

Population: 31,949,777 (2019)

GDP current (US$): 364.7 billion (2019)

Ease of Doing Business Ranking: 12th (2019)

Why Malaysia

Strong Economic Fundamentals

Malaysia is an attractive market with strong economic fundamentals. It has emerged as a regional hub for services, logistics, information, ICT and medical tourism. Its location and its population of 649 million coupled with US$ 3 trillion GDP has opened opportunities for companies searching for expansion of regional and global supply chains.

In 2019, India is Malaysia’s 10th largest trading partner. India’s total bilateral trade target with Malaysia of US$15 billion set for 2020 has been achieved back in 2018/2019.

In addition, Malaysia’s diversified economy presents business opportunities in many industries. Capitalise on Malaysia’s focus on high-value foreign investments to find opportunities for your business in healthcare, manufacturing, services, tourism, or transport.

Government-Led Growth

Malaysia’s government encourages a business-friendly environment.

The country had in place an ambitious Economic Transformation programme aimed at transforming Malaysia into a high-income economy with per capita Gross National Income of US$15,000 (S$20,250) by 2020. The plan offers opportunities for your business through initiatives like human capital development, the liberalisation of service sectors, as well as in areas such as education, food, healthcare, and retail.

Your company can benefit from the government’s strong commitment to preserve its heritage and culture. There are opportunities for your business in the tourism and hospitality sectors, especially in Johor Bahru, Klang Valley, Kota Kinabalu, Kuching, Malacca, and Penang.

As an India company, you can take advantage of the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income agreement between Malaysia and India, for tax benefits when you invest in Malaysia. The Malaysian government also has in place tax incentives for specific sectors and regions, such as tax incentives to strengthen and develop the green technology industry.

Profiled Industries

Consumer

Malaysia offers a sizeable demand market, a large middle class and over one-third of the population living in urban areas. This offers your business opportunities in areas like e-commerce, education, F&B, healthcare, and retail.

Malaysia’s cities have flourishing retail and food services sectors with a vibrant and developed shopping mall scene. The thriving franchise industry in Malaysia presents opportunities for your business to grow your brand there. Some 40% of the franchise brands in Malaysia are foreign-owned, most of which are in the F&B sector, followed by retail & apparel, and education. The franchise industry contributed RM27 billion/ US$6.6 billion to the country’s GDP in 2017 (latest available data). As of February 2019, 877 current domestic and international franchise brands are registered with the Malaysian authority.

India companies such as Charles and Keith, Sakae Sushi and Love, Bonito have made inroads into Malaysia. Since 2011, Malaysia has allowed retail and food services companies to be 100% foreign-owned. You can decide on different modes of entry, such as using a franchise model, setting up a joint venture or as a fully-owned subsidiary.

Digital Economy

Malaysia’s digital economy is growing significantly. The country’s digital economy is estimated by YCP Solidiance to be worth over RM 270 billion, which equates to roughly 18% of Malaysia’s gross domestic product (GDP). This makes Malaysia more digitally mature than many other countries in the Asia Pacific region, and also a digital step.

The digital economy is poised to be the new driver of development in Malaysia. The Malaysian government plans to set up a Digital Free Trade Zone (DFTZ), a special trade zone that provides physical and virtual space to help small and medium-sized enterprises (SMEs) with e-commerce activities. E-commerce giant Alibaba has announced plans to set up an e-commerce hub in Malaysia to provide logistics, cloud-computing and e-financial services in the DFTZ.

Malaysia has also made significant efforts to foster digital entrepreneurship. Your company can benefit from the help and opportunities provided by institutions like the Malaysia Digital Economy Corporation, the Malaysian Global Innovation and Creativity Centre and Cradle, which have been established to attract investments, provide incentives, facilitate financing, and offer training and opportunities to startup firms.

India companies can find business opportunities in the supporting ecosystem of Malaysia’s growing digital economy, in areas such as digital marketing, e-marketplace, last-mile fulfilment, logistics, and payment & financing solutions.

Manufacturing

Malaysia’s manufacturing sector is placed second only to services, accounting for about 24.6% of its GDP in 2019. Key manufacturing regions include Johor, Kedah, Melaka, Penang, and Selangor.

The Malaysia government is guiding the industry towards higher-value manufacturing activities. You can ride on the growth in this space, and explore opportunities in aerospace, chemicals, electrical & electronics, machinery & equipment, and solar space. You can also look for opportunities to supply components to the increasing number of multinational corporations in Malaysia.

If your business is in industrial automation and Internet of Things solutions, Malaysia is a market to consider, given its Industry 4.0 goal. The Malaysian government has put in place a National Industry 4.0 framework to support Malaysian manufacturers to upgrade their technology and transform through digitisation.

India established diplomatic relations with the Federation of Malaya (predecessor state of Malaysia) in 1957 immediately after Malaysia’s independence. The two countries enjoyed a strong relationship in the 1960s as a result of the personal friendship between Prime Ministers Nehru and Tunku Abdul Rahman Putra. PM Abdullah Badawi (2004-2009) took some important initiatives to develop a closer relationship with India. This trend was strongly reinforced by PM Dato’ Seri Mohd. Najib Tun Abdul Razak. Presently, India and Malaysia have developed close political, economic and socio-cultural relations. There is a considerable goodwill for India in Malaysia at people to people level, which hosts the third largest PIO community in the world. India and Malaysia are witnessing growing engagements in all aspects of bilateral relationship, including political, economic and trade, defence and security, tourism and education, health, human resources, public administration, etc.

Economic & commercial relations:

Economic and commercial relations are the mainstay of our bilateral partnership. A bilateral Comprehensive Economic Cooperation Agreement (CECA) covering goods, services and investment has come into effect from 1 July 2011. India and ASEAN have also signed an FTA covering goods, services and investment.

In 2018-19, the bilateral trade was US$ 17.24 billion, with India’s exports being US$ 6.43 billion and imports being US$ 10.81 billion. Thus, with strengthening bilateral economic and commercial relations, Malaysia has emerged as 13th largest trading partner for India while India figures among the ten largest trading partners for Malaysia.  

Mineral fuels, aluminium articles, organic chemicals, meat, machinery, iron & steel, cotton, tea and coffee.

Product Code Product Label India’s exports to Malaysia in 2019 (Value in US$ million)
27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral 1,372
76 Aluminium and articles thereof 1,170
29 Organic chemicals 553.2
02 Meat and edible meat offal 351.1
84 Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof 313.1
72 Iron and steel 259.9
89 Ships, boats and floating structures 191.3
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television 162.4
28 Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals 116.5
26 Ores, slag and ash 100.8

According to the ITC Trade Map, India has an untapped trade potential of US$ 6.2 billion. he products with greatest export potential from India to Malaysia are Copper cathodes, Aluminium, not alloyed, unwrought, and Bovine cuts boneless, frozen. Copper cathodes shows the largest absolute difference between potential and actual exports in value terms, leaving room to realize additional exports worth $503.8 mn.

Product code Description Export potential
740311 Copper cathodes US$ 679.5 million
760110 Aluminium, not alloyed, unwrought US$ 541.2 million
020230 Bovine cuts boneless, frozen US$ 282.9 million
8708XX Parts & accessories of motor vehicles, nes US$ 176.6 million
100630 Semi-milled or wholly milled rice US$ 156.2 million
720839 Flat-rolled products of iron or non-alloy steel US$ 142.9 million
3004Xb Medicaments consisting of mixed or unmixed products, for retail sale US$ 125 million

Minerals, animal oils, electrical machinery, machinery, copper articles, organic chemicals, ships and boats, aluminium and wood articles and iron and steel, etc.

Product Code Product Label India’s imports from Malaysia in 2019 Value in US$ million)
27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral 2,331.8
15 Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal 2,203.1
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television 820.3
84 Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof 787
74 Copper and articles thereof 627.9
29 Organic chemicals 454.5
89 Ships, boats and floating structures 425.5
76 Aluminium and articles thereof 403.6
72 Iron and steel 330.9
44 Wood and articles of wood; wood charcoal 305.1

High Commission of India
Level 28, Menara 1 Mon’t Kiara,
No. 1, Jalan Mon’t Kiara,
50480, Kuala Lumpur
Tel: (00-603) 6205 2350, 6205 2351, 6205 2352,6205 2353 & 6205 2354
Fax: (00-603) 6143 1173
Website: https://hcikl.gov.in/

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