Malaysia-India Trade Potential Remains Untapped, Says Envoy

KUALA LUMPUR, July 15 (Bernama) -- The huge potential for trade growth between Malaysia and India remains untapped due to the underutilised free-trade agreement (FTA) and ongoing negotiations for the Regional Comprehensive Economic Partnership (RCEP), High Commissioner of India to Malaysia T.S. Tirumurti said. Malaysia and India established the Comprehensive Economic Cooperation Agreement, a form of a FTA, on September 24, 2010. Tirumurti said the utilisation of the agreement has been low due to the lack of awareness among businesses in both countries. "The utilisation of the FTA has not been high because of lack of information. So, it is the endeavour of the government to tell them to start utilising it more," he told reporters at a briefing on the ASEAN-India Business Leadership Conclave 2016 here Friday. Tirumurti added that the RCEP, which is currently being negotiated, could play an important part in boosting trade between both countries. "Once we get RCEP done, that will have a huge impact and this will be an important component that will boost trade," he added. Formally launched in November 2012, RCEP is a proposed FTA between the ten member states of ASEAN and the six countries with which ASEAN has existing FTAs namely Australia, China, India, Japan, South Korea and New Zealand. The Ministry of International Trade and Industry (MITI) Secretary-General Jayasiri Jayasena said the slow impact of the FTA was due to the gradual elimination of tariffs after the agreement kicked off. "You don't expect them to have overnight elimination of duties. Therefore you cannot expect, when the agreement comes into force, for exports or trade to double," he said. Jayasiri agreed that awareness was another factor contributing to the slow adaptation to the FTA and the government has embarked on various initiatives, including outreach programmes, to create awareness among exporters on the opportunities arising from the FTA. Last year, Malaysia's trade with India stood at US$12 billion with exports contributing US$8.12 billion and imports US$3.9 billion. From January to May 2016, Malaysia-India trade stood at US$5 billion with exports accounting for US$3.6 billion and imports, the remaining US$1.4 billion. Meanwhile, on the overnight policy rate (OPR) cut, Jayasiri said the move by Bank Negara Malaysia was designed to boost domestic consumption by lowering cost of borrowing. "This will have a multiplying effect on economic activities because greater domestic consumption will create spin-off effects on economic activities," he added. Organised by the ASEAN-India Business Council (AIBC), the business conclave, scheduled for July 21, would highlight opportunities in areas such as healthcare, digital economy, logistics and small and medium entreprises. --BERNAMA