Home Semasa #Semasa: India-Malaysia bilateral trade to remain robust

#Semasa: India-Malaysia bilateral trade to remain robust

by Air Times Correspondent

KUALA LUMPUR, 24 August – While India has become the world’s food basket, the republic has also become the largest importer of Malaysian palm oil.

Indian High Commissioner B. Nagabhushana Reddy admitted that his country recognised that there was a significant potential for further trade expansion as Malaysia has been regularly importing a variety of food products from the former.

“Similarly, I am confident that India will continue to remain as the largest importer of Malaysian palm oil in the coming years.

“The food and agriculture business are not merely a sector; it is a lifeline that sustains communities, economies and nations.

“Both India and Malaysia have demonstrated expertise in this domain, with a wide array of produce ranging from grains to fruits, spices to palm oil, and millets to meats,” Reddy said at the inaugural ‘Food and Agriculture Sector Business-to-Business (B2B) Meeting’ organised by the Federation of Indian Export Organisations (FIEO) at the Sheraton Imperial Hotel in Jalan Sultan Ismail.

Reddy said that it was no surprise that the food and agriculture business formed a significant component of the India-Malaysia bilateral trade basket.

He added that food and agriculture products contributed to almost US$5.8 billion of the total US$20 billion overall bilateral trade in the last financial year 2022-23, or accounting to about 30% of the bilateral trade.

“India exported about US$1.8 billion worth of food and agriculture products, whereas Malaysia exported over US$ 4 billion worth of palm oil and related products to India.

“With the growing challenges to food security globally, India and Malaysia are well placed to overcome this challenge due to geographical proximity, complementarities in food products in each other’s countries, growing confidence in quality of products, growing use of digital commerce, adherence to phytosanitary compliances and broad consensus between the two governments to promote this sector for mutual benefit,” Reddy said.

Indian High Commissioner B. Nagabhushana Reddy addressing delegates at the inaugural ‘Food and Agriculture Sector Business-to-Business (B2B) Meeting’ organised by the Federation of Indian Export Organisations (FIEO) at the Sheraton Imperial Hotel in Jalan Sultan Ismail, Kuala Lumpur.

He added that India recognised that there was a significant potential for further expansion and had despatched a strong 40-member exporter delegation to Kuala Lumpur, to engage Malaysian companies, traders and prominent chambers of commerce and industry.

“The presence of such a strong delegation from India, covering diverse food and agriculture products, demonstrates India’s broad commitment in establishing meaningful partnerships and exploring avenues of collaboration with Malaysia,” Reddy said.

He stressed that there was enormous scope for trade diversification, a India’s range of spices, rice varieties and dairy products were highly sought after globally.

“Malaysia’s palm oil, tropical fruits and seafood are globally recognised. By leveraging each other’s strengths, we can diversify our trade portfolios and cater to a wider bilateral, as well as global market.

“There is lot of scope for collaboration along the value chain to maximise returns for both countries.

“Joint efforts in research and development, technology transfer and supply chain optimisation can lead to increased productivity and reduced wastage,” he said.

Reddy cited how India’s 3,000 agriculture- and 450 agriculture-technology startups and Malaysian palm oil plantations could benefit from sharing best practices and innovative solutions.

He emphasised that e-commerce and digital platforms offered unparalleled opportunities to connect buyers and sellers across borders.

“E-commerce platforms are serving as catalysts for trade, allowing Indian agriculture businesses direct access to Malaysian consumers and vice-versa.

“The convenience and reach of digital platforms can redefine the way we engage in trade. This is yet another area where agriculture-technology startups can play a crucial role,” said Reddy.

On another note, Reddy recognised the importance of culinary diplomacy, with over 2.7 million Malaysian ethnic Indians forming the second largest persons-of-indian origin globally.

“Our culinary traditions, as we know, have forged deep connections historically, and in modern times have also been promoting greater understanding.

“Within the food basket India exports meat, marine products, cereals, fruits, vegetables, spices and sugar to Malaysia,” he said, adding that Indian food exporters were regular participants in the Malaysian trade fairs and business events.

Indian mangoes, Reddy said, had recently obtained approval for export to Malaysia following the export of poultry eggs last December.

On concerns in Malaysia regarding the ban on importing non-basmati rice and the imposition of 40% export duty on onions till Dec 31, Reddy assured that the restrictions were not to limit trade but to ensure sufficient domestic supply within India.

The rice export ban, he said, did not cover about 30% of India’s rice export varieties.

“More importantly, India-Malaysia bilateral trade can now be settled in Indian Rupee.

“This means that all the trade contracts between Indian and Malaysian traders can now be denominated and invoiced in Indian Rupee and can also be settled in Indian Rupee.

“This mechanism is operationalised by the India International Bank of Malaysia, based in Kuala Lumpur, through its correspondent Union Bank of India,” said Reddy. – airtimes.my

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