What Happened
- During PM Modi's visit to Putrajaya on February 8, 2026, India and Malaysia signed 11 MoUs and cooperation documents across semiconductors, digital payments, defence, disaster management, anti-corruption, healthcare, audio-visual co-production, technical and vocational education, UN peacekeeping, and social security for Indian workers.
- The bilateral Digital Council was highlighted as a key mechanism driving semiconductor and technology cooperation between the two countries.
- An agreement between NPCI International (NIPL) and PayNet on cross-border QR-based merchant payments was signed, linking India's UPI with Malaysia's DuitNow payment system.
- Defence cooperation was expanded with the leaders welcoming progress under the Malaysia-India Defence Cooperation Committee, including regular joint exercises, training exchanges, and defence industry collaboration.
- The relationship was elevated to a Comprehensive Strategic Partnership, the highest level of bilateral engagement.
Static Topic Bridges
India's Semiconductor Mission and International Partnerships
India launched the India Semiconductor Mission (ISM) in December 2021 under the Ministry of Electronics and Information Technology (MeitY), with an initial outlay of Rs 76,000 crore ($10 billion). The mission aims to develop a semiconductor and display manufacturing ecosystem in India. India has signed semiconductor cooperation agreements with multiple countries, including the US (iCET initiative, 2023), Japan (semiconductor supply chain partnership, 2023), and now Malaysia.
- India Semiconductor Mission (ISM): launched December 2021; revised outlay of Rs 76,000 crore
- Key projects approved: Tata Electronics (fab in Dholera, Gujarat; in partnership with PSMC of Taiwan), Micron Technology (ATMP unit in Sanand, Gujarat), CG Power (OSAT facility)
- Malaysia is a major semiconductor hub: accounts for approximately 13% of global semiconductor packaging, assembly, and testing; hosts Intel, Infineon, Texas Instruments, and others
- Penang in Malaysia: known as the "Silicon Valley of the East"; major hub for semiconductor manufacturing
- India-Malaysia Digital Council: bilateral mechanism for technology cooperation, established during an earlier engagement
Connection to this news: The semiconductor MoU deepens India-Malaysia tech cooperation at a time when global semiconductor supply chains are being restructured. Malaysia's existing strengths in semiconductor ATMP (Assembly, Testing, Marking, and Packaging) complement India's push to build domestic fab capacity, creating potential for an integrated supply chain.
India's Defence Diplomacy in the Indo-Pacific
India's defence cooperation framework with ASEAN nations has expanded significantly under the Act East Policy. India conducts bilateral and multilateral naval exercises across the Indo-Pacific, maintains defence attache offices, and pursues defence production partnerships. The Malacca Strait, which lies between Malaysia and Indonesia, is a critical chokepoint for India's energy security, with over 80% of India's crude oil imports transiting through it.
- India-Malaysia defence cooperation: governed by the Malaysia-India Defence Cooperation Committee
- Bilateral exercises: India conducts naval exercises with Malaysia (though not as formalised as with Singapore or Japan)
- Malacca Strait: approximately 800 km long; handles about 25% of global traded goods; critical for India's oil import routes
- India-Malaysia defence cooperation areas: training exchanges, maritime security, counter-terrorism, intelligence sharing
- India's broader ASEAN defence engagement: ADMM-Plus (ASEAN Defence Ministers' Meeting-Plus; India is a member), Malabar Exercise (US-India-Japan-Australia), and MILAN (multilateral naval exercise hosted by India)
Connection to this news: The expansion of defence cooperation in the MoUs, including UN peacekeeping cooperation, reflects India and Malaysia's shared interest in maritime security and stability in the Indo-Pacific. The defence industry collaboration component signals a shift from buyer-seller relations towards joint production and technology sharing.
Comprehensive Strategic Partnership — India's Tiered Bilateral Framework
India maintains a tiered system of bilateral partnerships reflecting the depth and breadth of engagement with different countries. The hierarchy generally proceeds from a basic bilateral relationship to Strategic Partnership, Enhanced Strategic Partnership, and Comprehensive Strategic Partnership (CSP) at the highest level. India currently holds CSPs with a select group of countries including the US, Russia, Japan, Australia, France, Germany, the UK, and the UAE, among others.
- Comprehensive Strategic Partnership (CSP): India's highest level of bilateral relationship
- India-Malaysia relations upgraded: from Enhanced Strategic Partnership (2015) to CSP (February 2026)
- Other countries with CSP status with India: US (2023), Russia (2010), Japan (2014), Australia (2020), France (1998, upgraded), UK (2004, upgraded), UAE (2024)
- CSP typically involves: regular summit-level meetings, defence and security cooperation, economic integration, technology sharing, and people-to-people exchanges
- India-Malaysia diplomatic relations: established in 1957 (year of Malaysian independence)
Connection to this news: The elevation to CSP status reflects a significant upgrade in India-Malaysia relations. The 11 MoUs signed during this visit operationalise the CSP framework across defence, technology, digital economy, and social security, making it one of the most substantive bilateral upgrades in India's recent diplomatic calendar.
Key Facts & Data
- Number of MoUs signed: 11 (semiconductors, digital payments, defence, disaster management, anti-corruption, healthcare, audio-visual co-production, vocational education, UN peacekeeping, social security, security cooperation)
- India Semiconductor Mission outlay: Rs 76,000 crore ($10 billion approximately)
- Malaysia's share of global semiconductor ATMP: approximately 13%
- India-Malaysia bilateral trade (FY2024-25): approximately $19.86 billion
- Malacca Strait: approximately 800 km; handles ~25% of global trade
- India-Malaysia diplomatic relations: since 1957
- Relationship upgraded from Enhanced Strategic Partnership (2015) to Comprehensive Strategic Partnership (February 2026)
- Indian diaspora in Malaysia: approximately 300,000+
- UPI-DuitNow linkage: cross-border QR-based merchant payments via NPCI International-PayNet agreement