India, Malaysia ink pacts on semiconductors, digital payments

India and Malaysia on Sunday announced agreements to deepen cooperation in making semiconductors and for enabling digital payments, following talks between Prime Minister Narendra Modi and his Malaysian counterpart, Dato’ Seri Anwar Ibrahim.

The announcements came after the two leaders held a bilateral meeting in Malaysia on Sunday. Both sides unequivocally condemned terrorism in all its forms and manifestations, including cross-border terrorism, the latter being an obvious reference to Pakistan-sponsored terrorism. Modi-Ibrahim called for zero tolerance and concerted international efforts to combat the menace.

Secretary (East) in the Ministry of External Affairs, S Kumaran, told the media that the leaders also discussed the sale of India-made Dornier aircraft and maintenance support for Sukhoi-30 fighter jets. The Malaysian Air Force and the Indian Air Force use the same Russian-origin jet. Malaysia is also one of five-countries locked in maritime territorial disputes with China in the South China Sea.

A joint statement said: “The two sides reaffirmed the shared commitment of the two Leaders to further consolidate and expand the India–Malaysia Comprehensive Strategic Partnership”.

In his opening remarks, PM Modi said the core message of his visit was India’s desire to take relations with Malaysia “to a new level” and to expand cooperation in every field.

India announced the establishment of a Consulate General in Malaysia and the setting up of a dedicated ‘Thiruvalluvar Centre’ at the University of Malaya, Kuala Lumpur. Malaysia has a population of three million people of Indian origin.

An agreement was signed between India’s NPCI International Limited (NIPL) and Malaysia’s PayNet to establish bilateral payment linkages. This integration would enhance the ease of doing business and provide seamless, low-cost remittance solutions for tourists, students and small businesses. Bilateral trade between the two countries stands at $20 billion.

Further strengthening fin-tech cooperation, the two sides formalised the Malaysia–India Digital Council (MIDC), envisaged as a key platform to promote collaboration in fintech, e-governance, cybersecurity, artificial intelligence, Digital Public Infrastructure (DPI), and emerging technologies.

The two countries also inked an agreement on semiconductor cooperation. The leaders commended ongoing initiatives, including partnerships between IIT Madras Global and the Advanced Semiconductor Academy of Malaysia, as well as between the Indian Electronics and Semiconductor Association (IESA) and the Malaysia Semiconductor Industry Association (MSIA).

Malaysia is a key player in the semiconductor industry and commands 13 per cent stake in the global trade. India is on the cusp of being an international producer for commercial applications.

The leaders also said the Reserve Bank of India and Bank Negara Malaysia would be looking to promote usage of local currency settlement in bilateral trade and investments, and encouraged industries on both sides to further facilitate the invoicing and settlement of trade in local currencies – Indian Rupee and Malaysian Ringgit.

The discussions covered the full spectrum of bilateral relations, including political engagement, defence and security, maritime cooperation, trade and investment, the digital economy, science and technology, energy, agriculture, health, education, culture and tourism, the joint statement said.