15 December 2019

Trade Zone

Firms from Malaysia are very keen to participate in India’s construction and infrastructure projects

 

Malaysia External Trade Development Corporation (MATRADE), the national trade promotion agency of Malaysia, has been at the forefront of assisting foreign companies to source for suppliers of Malaysian products and services. The organisation, which is represented at 40 locations worldwide, also facilitates Malaysian companies to establish their presence overseas and raise their profile in foreign markets through different promotional drives including participation marketing missions and international trade fairs. MAZLAN HARUN, CONSUL & TRADE COMMISSIONER, MATRADE, MUMBAI offered SHRIKANT RAO a view of the increasing prospects of business engagement between Kuala Lumpur and New Delhi in construction and infrastructure space.

 

 

 

 

Give us an understanding of the contours of the current trade relations between India and Malaysia and the key areas of cooperation?

Malaysia – India bilateral trade has grown tremendously especially after the signing of the Malaysia – India Comprehensive Economic Cooperation Agreement (MICECA) in 2011. Total bilateral trade registered an increase of 48.8 percent from $8.99 billion in 2010 to $13.38 billion in 2013. Malaysia exported $ 8.17 billion and imported $5.21 billion worth of products from India. Malaysia and India complement each other in various sectors of the economy such as in petroleum, chemicals and metals. These are the top three products in Malaysia-India bilateral trade.

 

 

How important is India as a trade partner for Malaysia?  What is the view obtaining from Kuala Lumpur of India as a business opportunities destination?  

Trading between the two countries has been established for centuries even before the formation of Malaysia in 1957 and India has always been Malaysia’s largest trading partner in South Asia. In 2013, India was Malaysia’s 10th largest trading partner in the world, 10th biggest export market and 12th largest import source for Malaysia. The statistics itself shows the importance of India in Malaysia’s trade. India is going through a very exciting time with a number of new policies announced by the government to improve the business environment and Malaysian companies in general, have a positive views and opportunistic about the immense future business opportunities in India.

 

 

Briefly tell us about the role played by Matrade as a business and trade facilitator and the main initiatives it has taken recently in building Indo-Malaysian relationship? Can you give us an idea of the current levels of Malaysian investments in India and the areas they have been applied?

Matrade through its offices in Mumbai and Chennai had been actively assisting Indian companies to source for suppliers of Malaysian products, technologies and services. This year we had arranged a big number of visits to Malaysia for this purpose. We also had assisted Indian companies looking for Malaysian business partners and facilitating Malaysian companies planning to invest in India.  India has emerged as one of main investments destinations for Malaysian companies. According to the Department of Industrial Policy and Promotion (DIPP), Malaysia was the 22nd biggest investor in India from April 2000 to July 2014 with investment worth $721.9 million. However, this figure does not include substantial flow of Malaysian investment via establishment in other countries such as Mauritius which will bring Malaysia’s cumulative investment in excess of $6 billion. Malaysian investments in India are mainly in non-conventional energy, construction, metallurgical industries, services, power and telecommunication.

 

 

Tell us of the recent delegational visits from – and to – Malaysia that have taken place in the context of building of ties between Indian and Malaysian government and private firms?  What are the current areas of interest and engagement in the construction and infrastructure space? 

This year several high profile visits by Malaysian cabinet members were held to promote diplomatic and trade relations. In terms of trade, the Hon. Minister of International Trade and Industry Malaysia led a delegation to Bangalore and Chennai from 27-30 January 2014. The visit was held as part of the initiatives to increase bilateral trade and investment between Malaysia and India. In June 2014, the Minister of Plantation Industries and Commodities, Malaysia also visited India to inaugurate the Palm Oil Trade Fair and Seminar. During the visit, he had meetings with various Indian companies and associations related to palm oil, rubber and timber. Matrade also organised two big events with participation of more than 50 Malaysian companies, ie. Malaysia Services Exhibition in Ahmedabad in March 2014 and Showcase Malaysia in Bangalore in June 2014.

 

 

Could you name the important Malaysian companies which already have a presence in India and have established themselves as key players in the country’s development landscape?  What are the new business opportunities they would be seeking?

Khazanah Nasional Berhad which is the Government of Malaysia's strategic investment fund holds direct interest in Apollo Hospitals Enterprise Ltd and IDFC Limited. Several Khazanah’s investee companies also have operations or stakes in Indian companies such as ACR Capital Holdings Pvt. Ltd., Parkway Pantai Ltd., UEM Group Berhad, Axiata Group Berhad, Maybank and CIMB Bank. These companies are basically involved in financial, banking, healthcare, construction and telecommunication.

 

 

What are the sectors of development in India in which Malaysian firms are looking to collaborate?

Malaysian companies are interested mainly in the construction and infrastructure sector. To date, in India, Malaysian companies have completed 81 projects worth $ 3.8 billion and 14 projects worth $ 1.61 billion are still under various stages of construction.

 

Which are the new Malaysian firms that are looking to be involved in tie ups for various construction sector projects in India or are looking to invest here in specific projects?  What are the areas of construction/infrastructure in India in which firms from your country can provide expertise?

There is a considerable interest amongst Malaysian companies to participate in construction and infrastructure projects in India. Apart from the Malaysian companies that are already operating in India, we had received a number of serious enquiries from Malaysian companies on the opportunities available. Malaysia’s main expertise lies in construction of buildings, roads and highways, railways, bridges, monorails and airports; water treatment and power plants; steel structure fabrication, installation and erection; mixed development projects including housing, hotels, leisure and luxury residences; and building maintenance, including for high-rise towers. Our companies could also share their experiences and project management expertise undertaking various projects in Malaysia under the Public – Private Partnership (PPP) model which has been successfully implemented since the 1980s.

 

India is witnessing significant development in areas like airports, metro rail and railways space. Give us a sense of the support Malaysia can provide India in these and other areas?

Malaysian companies could give a big support to India in the development of airports as Malaysian companies have been undertaking airport projects especially in Malaysia and the Middle East. A Malaysian company Malaysia Airport Holding Berhad, together with its consortium partners, is currently managing the Indira Gandhi International Airport and the Rajiv Gandhi International Airport. Malaysian companies could also contribute towards the development of urban transportation systems in India. For example, Scomi Engineering, together with its Indian partner, Larsen & Toubro constructed and currently operates the Mumbai Monorail. Not many people know that the monorail is suitable for densely populated areas as it has a very slim structure hence does not need much right of way and land use. Monorail also has greater maneuverability with a turning radius of 50m and ability to climb gradients of 6 degrees which makes it more flexible than a metro system. Scomi Engineering is also currently carrying out monorail expansion project in Malaysia and three projects in Brazil.

 

 

Tell us about the important landmark infrastructure and construction projects in Malaysia from which India can derive learnings? 

There are quite a number of landmarks that we are proud of and I believe some could be a model for development in India. Just to mention a few of them we have Putrajaya e-Government Administrative Centre, Cyberjaya, which is Malaysia’s first smart city; Kuala Lumpur Sentral – a virtual airport within a city; Port of Tanjung Pelepas – amongst the world’s fastest growing ports; Smart Motorway Tunnel – a unique dual purpose tunnel for flood mitigation and traffic flow; North South Highway Project (PLUS) – a 848 km highway; Kuala Lumpur International Airport (KLIA and KLIA2); and the Urban transportation systems – LRT, ERL and Monorail.

 

Could you talk of the level of engagement of Indian firms in Malaysian projects? Which are the Indian companies which have a presence in your country and tell us about the role they are playing there and the prospects for enhanced collaboration? 

Currently there are more than 100 Indian companies having operations in Malaysia mainly in manufacturing and ICT. Among the major Indian companies undertaking projects in Malaysia are Indian Railway Construction Co. Ltd (IRCON) which has been actively engaged in the development of railways in Malaysia since 1988 and Larsen & Toubro (L&T) in the Oil & Gas sector. These two companies have partnered with Malaysian companies to undertake various projects in Malaysia and there are good prospects for them to continue the cooperation in undertaking projects in other countries including India.

 

 

Is there a role Indian firms can play in Malaysia in terms of investments or association in projects?

There are ample investment opportunities in Malaysia for Indian companies especially in the 12 National Key Economic Areas (NKEAs) and other focus sectors of the respective Regional Economic Corridors in Malaysia. Malaysia welcomes the participation of Indian companies in these sectors especially in the tourism related projects, telecommunication infrastructure, logistics and others.

 

Will you briefly touch upon the main challenges for Malaysian companies operating out of India and the must do steps for New Delhi to make doing business easy?

Malaysian companies in India mainly faced project delays due to bureaucracy and lengthy procedures. However, India, under the new government is in the right direction as the government has announced various steps to reduce bureaucracy and determined to attract foreign investors to India.

 

What is your outlook for Indo Malaysian engagement in the construction/infrastructure space? What should the two countries do to raise the trade and doing business profile?

Although the current relations are good, I believe this cooperation should be further enhanced and developed. In terms of the construction and infrastructure sector, there are huge opportunities for Malaysian companies. I would like to see more partnerships being form by Malaysian and Indian companies to jointly explore these opportunities. Frequent high level
visits should be organised and other private sector platforms such the Malaysia – India Business Council, Malaysia – India CEO Forum and others should be fully utilised to find common interests and a win-win situation for both countries.  

 

 

Malaysia - India Bilateral Trade    

 

 

TOTAL EXPORTS

 

TOTAL IMPORTS

 

TOTAL TRADE

 

TOTAL TRADE

 

Year

 

USD Mil

 

USD Mil

 

USD Mil

 

USD Mil

 

2003

 

2,537.41

 

671.08

 

3,208.49

 

3,208.5

 

2004

 

3,014.97

 

1,218.58

 

4,233.55

 

4,233.5

 

2005

 

3,998.60

 

1,101.04

 

5,099.64

 

5,099.6

 

2006

 

5,197.66

 

1,352.37

 

6,550.03

 

6,550.0

 

2007

 

5,882.50

 

2,078.90

 

7,961.40

 

7,961.4

 

2008

 

7,417.41

 

3,099.86

 

10,517.27

 

10,517.3

 

2009

 

4,915.05

 

2,232.90

 

7,147.96

 

7,148.0

 

2010

 

6,512.15

 

2,483.79

 

8,995.95

 

8,995.9

 

2011

 

9,206.03

 

3,326.96

 

12,532.99

 

12,533.0

 

2012

 

9,497.09

 

3,820.52

 

13,317.60

 

13,317.6

 

2013

 

8,170.62

 

5,209.94

 

13,380.57

 

13,368.4

 

2013 (Jan-Aug)

 

5,386.1

 

3,742.6

 

1,643.6

 

9,128.7

 

2014 (Jan-Aug)

 

6,357.1

 

2,872.7

 

3,484.4

 

9,229.8

 

 




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