What Happened
- PM Modi undertook an official visit to Malaysia on 7-8 February 2026, at the invitation of PM Anwar Ibrahim
- This was Modi's third visit to Malaysia and the first after the bilateral relationship was elevated to a Comprehensive Strategic Partnership (CSP) in August 2024
- Both leaders discussed political engagement, defence and security, maritime cooperation, trade and investment, digital economy, science and technology, energy, agriculture, health, education, and culture
- Multiple MoUs were signed covering anti-corruption, disaster management, semiconductors, healthcare, national security, vocational education, and peacekeeping cooperation
- The 10th India-Malaysia CEOs Forum called for modernisation of the Comprehensive Economic Cooperation Agreement (CECA)
Static Topic Bridges
India-Malaysia Comprehensive Economic Cooperation Agreement (CECA)
The India-Malaysia CECA, signed in 2011, is one of India's bilateral comprehensive trade agreements covering goods, services, and investment. Its modernisation has become a priority as bilateral economic relations evolve.
- CECA signed: February 2011, entered into force: July 2011
- Coverage: Trade in goods, trade in services, investment, economic cooperation, dispute settlement
- Bilateral trade in 2025: RM 79.49 billion (approximately $18.59 billion)
- Malaysia's exports to India: RM 52.30 billion ($12.24 billion); India's exports to Malaysia: RM 27.19 billion ($6.35 billion)
- Key Indian imports from Malaysia: Palm oil, LNG, electronic components, petroleum products
- Key Indian exports to Malaysia: Petroleum products, aluminium, meat, cereals
- Modernisation proposals include: Expanding coverage to fintech, renewable energy, and healthcare; simplifying customs procedures; aligning with ASEAN-India Trade in Goods Agreement (AITIGA); supporting SME participation
- India's palm oil imports from Malaysia are a significant component — India is among the world's largest palm oil importers
Connection to this news: The CEOs Forum push to modernise CECA reflects the recognition that the 2011 agreement does not cover emerging sectors like digital economy, semiconductors, and AI that now dominate both economies' growth strategies.
Act East Policy and ASEAN Centrality
India-Malaysia ties are situated within the broader framework of India's Act East Policy, which prioritises engagement with ASEAN nations as a strategic, economic, and civilisational priority.
- Act East Policy (upgraded from Look East Policy in 2014) covers ASEAN, East Asia, and the Indo-Pacific
- India is a Dialogue Partner of ASEAN since 1992, Sectoral Dialogue Partner since 1996, and Summit-level partner since 2002
- India-ASEAN Free Trade Agreement in Goods: Signed 2010; Trade in Services and Investment: Signed 2014
- ASEAN-India Trade in Goods Agreement (AITIGA) is under review/upgrade — aimed at deepening trade liberalisation
- India's trade with ASEAN: approximately $130 billion (2024-25), making ASEAN India's fourth-largest trading partner bloc
- Strategic significance of Malaysia: Second-largest economy in ASEAN, located on the Strait of Malacca (through which 60% of India's maritime trade passes)
- India and Malaysia have a Defence Cooperation Agreement (2012) and conduct joint naval exercises (Harimau Shakti for army, bilateral naval exercises)
Connection to this news: Modi's Malaysia visit follows a broader pattern of deepening bilateral ties within the Act East framework, with the CSP elevation providing institutional architecture for cooperation in emerging domains beyond traditional trade.
India's Semiconductor Ambitions and Global Supply Chain Partnerships
The semiconductor MoU signed during the visit reflects India's accelerating efforts to build a domestic semiconductor ecosystem, leveraging partnerships with nations that have existing chip industry capabilities.
- India Semiconductor Mission (ISM) was announced in 2021 with an outlay of Rs 76,000 crore ($10 billion)
- Three semiconductor fabrication units approved in India: Tata Electronics (Dholera, Gujarat; Jagiroad, Assam) and CG Power-Renesas (Sanand, Gujarat)
- Malaysia is the world's sixth-largest semiconductor exporter and seventh-largest in the global semiconductor supply chain
- Penang (Malaysia) is a major semiconductor packaging, assembly, and testing (OSAT) hub — hosting Intel, AMD, Infineon, and others
- India imports approximately $10-12 billion worth of semiconductor chips annually
- The global semiconductor supply chain is concentrated: TSMC (Taiwan) produces ~55% of the world's chips; Samsung (South Korea) ~18%
- CHIPS Act-style industrial policies have been adopted by the US, EU, Japan, South Korea, and India to diversify chip manufacturing
Connection to this news: The semiconductor Exchange of Notes between India and Malaysia connects India's growing chip manufacturing ambitions with Malaysia's established semiconductor ecosystem, potentially enabling technology transfer, workforce training, and joint R&D.
Key Facts & Data
- Modi's Malaysia visit: 7-8 February 2026 (third visit, first after CSP elevation)
- India-Malaysia bilateral trade (2025): ~$18.59 billion
- India-Malaysia CECA: Signed 2011, under modernisation discussions
- Malaysia: Second-largest ASEAN economy, sixth-largest semiconductor exporter globally
- India Semiconductor Mission: Rs 76,000 crore ($10 billion) outlay
- Strait of Malacca: Carries ~60% of India's maritime trade
- MoUs signed: Anti-corruption, disaster management, semiconductors, healthcare, national security, TVET, peacekeeping
- International Big Cats Alliance (IBCA) framework agreement also submitted
- India-ASEAN trade: ~$130 billion (2024-25)