India, Malaysia Ink Free Trade Pact
India signed a comprehensive economic cooperation agreement (CECA) with Malaysia, which will come into effect on 1st July 2011. The agreement with Malaysia gives its doctors, accountants, two-wheelers, cotton garments and basmati rice greater access to the Malaysian market. Moreover, India has committed to freer entry norms for Malaysian engineers, accountants and IT specialists coming to the country on temporary contractual assignments.
Sectors such as accounting and auditing, architecture, urban planning, engineering services, medical and dental, IT & ITES, Management Consulting Services etc. would get Malaysian market access.
The agreement envisages liberal trade in goods and services and a stable investment regime to promote foreign investment between the two countries. The goods package under the CECA takes the tariff liberalization beyond the India-ASEAN FTA commitments on items of mutual interest for both the countries. The two countries have committed to enhance services trade.
Malaysia has offered comparatively higher level of FDI in key sectors of interest to India, which include construction services (51%), computer and related services (100%), management and consultancy services (100%).
The FTA with Malaysia was signed on the heels of India inking a Comprehensive Economic Partnership Agreement (CEPA) with Japan. The two countries have already liberalised their trade in goods through an India-ASEAN free trade agreement, which came into force from January 2010. Malaysia is the 3rd largest trading partner of India among the ASEAN (Association of South East Asian Nations) countries. Between 2005 and 2010 India-Malaysia trade increased from US $ 3.52 billion to US $ 9.03 billion.
