Commerce Ministry seeks inputs from trade for India-Malaysia CECA evaluation

Saddled with a excessive commerce deficit greater than a decade after implementing a free commerce settlement with Malaysia, India is ready to start a evaluation means of the pact in a joint fee assembly to be held quickly with its commerce companion to develop and diversify the commerce basket and make it extra balanced, sources have mentioned.

“The Commerce Division has sought inputs from numerous trade our bodies and export promotion councils on the tariff and non-tariff obstacles they face in Malaysia, the regulatory points which might be performing as hindrances and the measures that would assist commerce facilitation. These could be a part of India’s agenda within the joint fee assembly for reviewing the India-Malaysia free commerce pact. The concept is to extend exports and bridge the commerce deficit,” a supply monitoring the matter instructed businessline.

The free commerce pact or CECA (Complete Financial Cooperation Settlement) between Malaysia and India was carried out in July 2011 masking commerce in items, providers, investments and financial cooperation. Within the space of products within the CECA, each nations supplied tariff liberalisation past the India-ASEAN FTA commitments on gadgets of mutual curiosity for each.

Commerce deficit

Nonetheless, like within the case of the India-ASEAN FTA, India’s commerce deficit elevated with Malaysia after the implementation of the CECA.

In 2010-2011, when the India-Malaysia CECA was signed, India’s commerce deficit with Malaysia was at $2.65 billion with its exports valued at $3.87 billion and imports at $6.52 billion. The commerce deficit widened to $5.49 billion in 2023-24, with India’s exports to Malaysia at $7.26 billion and imports at $12.75 billion.

The federal government has requested numerous sectors to checklist out merchandise the place tariffs in Malaysia are nonetheless excessive and will result in higher market entry if lowered. “Data has additionally been sought on any non tariff obstacles being confronted by Indian exporters, as an illustration these associated to sanitary & phytosanitary requirements and technical obstacles to commerce,” the supply mentioned.

The 2 sides may additionally work on PSR (product particular guidelines of origin) to provide flexibility to some merchandise within the willpower of the place they originate from, the supply added. Guidelines of origin are the standards wanted to find out the nationwide supply of a product.

Main exported gadgets from India to Malaysia embody petroleum merchandise, aluminium merchandise, buffalo meat, natural chemical substances and electrical equipment & gear. 

Main gadgets imported by India from Malaysia embody vegetable oils, electrical equipment, gear and elements, petroleum merchandise, nuclear reactors, boilers, equipment, and mechanical home equipment and chemical substances.