Malaysia Handbook

Supported by:

Malaysian Industrial Development Authority (MIDA) andConsortium of Indian Industries in Malaysia (CIIM)

Confederation of Indian IndustryHigh Commission of IndiaKuala Lumpur

Supported by:

Malaysian Industrial Development Authority (MIDA) andConsortium of Indian Industries in Malaysia (CIIM)

Confederation of Indian IndustryHigh Commission of IndiaKuala Lumpur

October 2009

Disclaimer:

The publisher and authors have made every effort to ensure the information in this book was correct at the time of giving to the press. However, they do not assume and hereby disclaim any liability to any party for any loss or damage caused by the errors, omissions or misleading information whether such errors or omissions result from negligence, accident, or any other cause. Reference to other sources and organizations should not be construed as endorsement.

October 2009

Published by :

Confederation of Indian IndustryThe Mantosh Sondhi Centre23, Institutional Area, Lodi RoadNew Delhi – 110 003 (India)

The High Commission of IndiaNo. 2 Jalan Taman DutaOff Jalan Duta 50480 Kuala Lumpur, Malaysia

Economic relations between India and Malaysia have greatly

strengthened in the last few years. Trade has more than doubled

between 2005 and 2008, while bilateral investments in both

directions have soared. Economic cooperation in other areas such

as services trade, education, infrastructure projects, tourism, etc.

has also intensified. For India, Malaysia has emerged as a key

business partner.

To facilitate a closer economic and commercial partnership between

the two countries, the High Commission of India, Kuala Lumpur, and

the Confederation of Indian Industry (CII) have taken the initiative of

bringing out the publication - "Doing Business in Malaysia:

Handbook for Indian Business”.

Malaysia enjoys several advantages in relation to India, including

proximate geographical location across the Indian Ocean, state-of-

the-art infrastructure, and common legal systems among others. Its

diverse ethnic, religious and linguistic mix resonates well with Indian

culture. Strategically located in the heart of South East Asia, it offers

a cost-competitive destination for Indian investors addressing the

ASEAN region as well as other international markets. Malaysia has

one of the largest communities of persons of Indian origin (PIOs)

numbering close to 2 million. In addition, there are a large number of

Indian professionals in top positions as well as about 150,000 Indian

workers in a range of economic and commercial activities in

Malaysia.

The spectacular progress of the Malaysian economy since the late

eighties and the liberalization of the Indian economy since 1991

have triggered new dimensions in bilateral commercial and

economic relations. Bilateral trade for the first time crossed the US

$10 billion mark in 2008, with India emerging as the 8th largest

export destination for Malaysia and the 12th largest overall trading

partner. Indian investments in Malaysia are also on the rise with

inflows of about US $ 1 billion since 2007. The present involvement

of Indian companies in Malaysia extends across diverse sectors,

including infrastructure, manufacturing, services, and construction

projects. Likewise, footprints of Malaysian companies in India have

expanded rapidly in recent years.

Fo

rew

ord

Doing Business in Malaysia - Handbook for Indian Business

The recent signing of ASEAN-India Free Trade Agreement in Goods

will open up new opportunities for further expanding trade and

investments between India and Malaysia. A bilateral Comprehensive

Economic Cooperation Agreement is also being negotiated.

The High Commission of India has been servicing visiting Indian

business delegations and organizing trade and investment-related

activities and events. This practical guidebook provides basic

information to Indian businesspersons interested in doing business

with Malaysia or planning to set up operations in this country. We

hope this publication will be useful to Indian businesses in pursuing

economic and commercial ties with Malaysia, and also to explore the

larger ASEAN market with Malaysia as a hub.

I would like to convey our sincere appreciation to CII for joining us in

bringing out this handbook. I would also like to acknowledge the

support received from the Malaysian Industrial Development

Authority (MIDA) and the Consortium of Indian Industries in Malaysia

(CIIM).

High Commissioner of India

Kuala Lumpur

Ashok K Kantha


The Confederation of Indian Industry is happy to be associated with the High

Commission of India, Kuala Lumpur, in bringing out the guidebook ‘Doing Business in

Malaysia: Handbook for Indian Business’. I believe this handbook comes at an

opportune moment and will further boost the high-growth trajectory of bilateral

economic cooperation.

Through our regional office in Singapore - and dedicated office in Kuala Lumpur in

2002 - 2004 - CII has built a strong and close partnership with academic and business

institutions in Malaysia. We work together with them to host a range of activities that

bring Indian and Malaysian enterprises together.

A new initiative of CII is the India-Malaysia Strategic Dialogue, which goes beyond

business to focus on wider economic, developmental, and partnership issues. This is

an annual event, to be held alternately in Malaysia and India. Recognising the rising

trend of bilateral trade and investment relations, and the new opportunities emerging

from the India-ASEAN FTA, we also propose to organise an annual CII CEOs’ Core

Group mission to Malaysia.

Events organised by CII recently include the India Education Fair in partnership with

the High Commission of India in June 2009 at Kuala Lumpur, interaction with MITI

Minister, and participation of large contingent from Malaysia at the annual Pravasi

Bharatiya Divas, among others.

CII supports international and domestic businesses in a number of ways, including

trade fairs, conferences, networking platforms and business development services.

We thank the High Commission of India, Kuala Lumpur, for associating us with this

handbook, and look forward to partnering Indian and Malaysian businesses in

intensifying bilateral economic cooperation.

Director General

Confederation of Indian Industry (CII)

Chandrajit Banerjee

Tab

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tsDoing Business in Malaysia - Handbook for Indian Business

PART 1 : About Malaysia

Introduction

Economy

Bilateral Relations

Visitor Information

• Geography and People; Political Structure; Indian Diaspora; General information

• Advantages; Overview; International Trade; FTAs; Malaysia in ASEAN

• Trade; Potential Sectors; Investment; Bilateral Treaties and Agreements; ASEAN-India FTA

• Visas; Work Permits; Information for Families; Education; Accommodation and Living Conditions; Food; Health services; Transport; News and Media; Cultural Activities; Places of Worship

1

8

23

38

PART 2 : Doing Business in Malaysia

Institutional Framework

Trade

Investment

Some Sectoral Opportunities

High Commission of India

Business Tips

Major Exhibitions

Indian Business and Community Associations

Useful links

• MITI; MIDA; MATRADE; SMIDEC; MSC Malaysia

• Business Presence; Exporting to Malaysia; Importing from Malaysia; Trade Exhibitions

• Special Zones; Taxation; New Economic Policy; Arbitration

• Manufacturing – Automotives; Electronics; Plastics; Chemicals; Biotechnology and Pharmaceuticals

• Services – Higher Education; Tourism; ICT

• Business Centre; Newsletters; Activities

47

53

57

89

85

80

79

77

64

Geography and People • Political Structure

• Indian Diaspora • General Information

GEOGRAPHY

PEOPLE

CLIMATE AND TERRAIN

The Federation of Malaysia comprises of Peninsular Malaysia and

the states of Sabah and Sarawak on the Borneo Island. Strategically

situated at the head of the Straits of Malacca, Malaysia is the third

largest economy in the ten-member ASEAN grouping and its

second largest trading economy. Geographically, it has the

distinction of being bounded by the Andaman Sea on the west and

the South China Sea on the east.

This geostrategic location is reflected in Malaysia’s multi-ethnic,

multi-religious and multi-lingual population. Its 27 million people

include just over 50% Malays, 24% ethnic Chinese, 11% indigenous

tribes, and 8% ethnic Indians. Close to four-fifths of the population

resides in Peninsular Malaysia. Eastern Malaysian states of Sabah

and Sarawak are home to about 5 million people.

While Islam is the official religion and more than half of the

population is Muslim, the religions of Buddhism, Christianity and

Hinduism are also widely practised.

Bahasa Malaysia and English are the official

languages of Malaysia. English is widely

spoken and ethnic languages such as Tamil,

Mandarin and Chinese dialects are prevalent.

Malaysia enjoys a tropical climate with daily

temperatures ranging from 21C to 32C

throughout the year and rainfall practically

every day. Humidity is high and thunderstorms

are frequent. The monsoon season covers the

west coast from September to December and

the east coast from October until February.

Intr

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1

The terrain is generally low with rising hilly areas, covered with

rainforests, plantations and paddy fields. Sabah is home to Mount

Kinabalu, the highest peak in South East Asia.

Malaysia was invaded by successive European powers from the

early 16th century, beginning with the Portuguese and followed by the

Dutch. The British established protectorates from the 19th century

and ruled until the country gained independence in 1957. It was also

occupied by Japanese forces from 1942 to 1945. The British

established the semi-autonomous Federation of Malaysia in 1948,

but rising nationalism led them to withdraw in 1957. Independent

Malaysia came about in 1963 composed of Malaya, Singapore,

Sabah and Sarawak. Singapore left the federation in 1965.

The Federation of Malaysia is a constitutional monarchy headed by a

King from one of nine Malay Sultanates in rotation for a term of five

years. The King, or Yang di-Pertuan Agong, has a largely ceremonial

role and is head of the Islamic faith. The present head of state of the

federation is Tuanku Mizan Zainal Abidin, Sultan of Terengganu state.

The government is led by the Prime Minister through a democratic

parliamentary system. The country has 13 states and federally

administered territories that include the capital of Kuala Lumpur.

Elections are held every five years for the federal parliament and the

state assemblies.

States enjoy substantial political authority. State assemblies are

elected through elections held simultaneously with general elections,

except in Sarawak. The governments are headed by Menteri Besar or

Chief Executive in states with sultans, or chief ministers in states

headed by governors.

The ruling Barisan Nasional, or National Front, is a coalition of the

United Malay National Organisation (UMNO), Malaysian Chinese

Association (MCA), and Malaysian Indian Congress (MIC), among

several other regional and national parties. It has been in government

at the federal level since independence in 1957.

HISTORY

POLITICAL STRUCTURE

2


As a former British colony, Malaysia is a member of the Commonwealth and enjoys

many institutions in common with India such as parliamentary democracy, judicial

and legal systems, English language, education, administration, etc.

Malaysia is a founding member of the Association of South East Asian Nations

(ASEAN) and the Organisation of the Islamic Conference (OIC).

Y.A.B. Dato’ Sri Mohd. Najib Bin Tun Haji Abdul Razak

Prime Minister & Minister of Finance

Y.A.B. Tan Sri Dato' Haji Muhyiddin Bin Mohd. Yassin

Deputy Prime Minister & Minister of Education

Y.B. Dato’ Seri Ong Tee Keat

Minister of Transport

Y.B. Senator Tan Sri Dr. Koh Tsu Koon

Minister in Prime Minister’s Department

Y.B. Datuk Mustapa Bin Mohamed

Minister of International Trade and Industry

Y.B. Datuk Anifah Aman

Minister of Foreign Affairs

Y.B. Dato' Seri Hishammuddin Bin Tun Hussein

Minister of Home Affairs

Y.B. Dato' Seri Utama Dr. Rais Yatim

Minister of Information, Communication And Culture

Y.B. Tan Sri Nor Mohamed Bin Yakcop

Minister In the Prime Minister's Department,

Economic Planning Unit

Y.B. Datuk Peter Chin Fah Kui

Minister of Energy, Green Technology and Water

KEY MEMBERS OF CABINET

3

Y.B. Dato' Seri Mohd Shafie Bin Haji Apdal

Minister of Rural and Regional Development

Y.B. Dato' Seri Mohamed Khaled Bin Nordin

Minister of Higher Education

Y.B. Datuk Dr. Maximus Johnity Ongkili

Minister of Science, Technology and Innovation

Y.B. Datuk Dr. S. Subramaniam

Minister of Human Resources

Y.B. Tan Sri Bernard Giluk Dompok

Minister of Plantation Industries and Commodities

Y.B. Dato' Sri Dr Ng Yen Yen

Minister of Tourism

Y.B. Dato' Seri Dr. Ahmad Zahid Bin Hamidi

Minister of Defence

Y.B. Dato' Shaziman Bin Abu Mansor

Minister of Works

Y.B. Dato' Sri Liow Tiong Lai

Minister of Health

Malaysia is home to the second largest population of Persons of

Indian Origin (PIO) in the world. PIOs in Malaysia number about 1.9

million, comprising about 8% of the total population. The majority

originate from Tamil Nadu, and there is a strong community of Indians

whose roots trace back to Punjab, Kerala, Andhra Pradesh, Gujarat,

West Bengal and other parts of India.

Historically, Indians were brought to Malaysia as indentured labour by

British colonialists to work on rubber estates and later shifted to oil-

palm plantations. After Malaysia gained independence in 1957,

Indian professionals came to work as doctors, professors, engineers,

INDIAN DIASPORA

4


lawyers and civil servants. While a majority of the PIO population in Malaysia is low-

income, Indians are significantly represented in many professional and business

sectors such as medical, legal and academic sectors as well as civil services.

Malaysia is also home to a significant group of Indian expatriates working in

Malaysian, Indian and multinational companies at senior management positions. In

addition, there are about 140,000 skilled and semi-skilled workers from India involved

in restaurants, personal services, manufacturing sector, manual labour and other

fields.

PIOs in Malaysia largely adhere to traditional Indian culture and language. The

festival of Deepawali is a national holiday and Thaipusam has been declared a

holiday in several states. Thousands of Hindu temples are found all over the country.

Tamil language schools are part of the education system. South Indian food is well

represented in restaurants, street food and food courts. Indian dance and music is

widely accepted as part of Malaysian culture.

A number of political, cultural and business associations representing Indian-

Malaysian interests are active all over the country.

Malaysia is well-connected by air with international airports in several cities. Its main

airport at Kuala Lumpur is 75 km from the city, about 45 minutes on the excellent

highway, and is accessible by road, bus, or the airport express train.

Malaysian Airlines operates direct flights connecting Kuala Lumpur to Bangalore,

Chennai, Hyderabad, Mumbai and New Delhi. The low-cost airlines, Air Asia,

operates daily flights to Tiruchirapalli. Indian Airlines conducts daily direct flights

between Chennai and Kuala Lumpur. Jet Airways also operates daily direct flights on

Kuala Lumpur-Chennai sector.

www.indianairlines.in/index.aspx

www.malaysiaairlines.com/my/en/home.aspx

www.airasia.com/site/my/en/home.jsp

www.jetairways.com

GENERAL INFORMATION

Air Links

5

Tourism

Currency

Banking Hours

Most tour operators offer packages for tourism in Malaysia and the

country is a highly popular destination for Indians, with over 550,000

Indian visitors arriving in Malaysia in 2008.

The main cities of tourist attraction are Kuala Lumpur, Penang and

Langkawi. Kuala Lumpur, the capital, is home to the iconic Petronas

Twin Towers, old Batu Cave Temple of Lord Murugan, and other

tourist sites. Penang offers stately colonial architecture, beach

activities and unique street food. Langkawi Island is known for its

mangrove forests and duty-free shopping. Other major tourist

destinations are Melaka, the confluence of many cultures, and

Genting Highlands, which has casinos and theme parks.

Malaysia boasts of excellent beaches and golf courses, with high-

quality resorts and spas at relatively affordable rates. Deep sea diving

and snorkelling are major attractions, and the East Malaysian states

of Sabah and Sarawak offer nature tourism to rainforest habitats.

www.tourism.gov.my/en/about/default.asp

The monetary unit of the country is Ringgit Malaysia and is written as

RM. The exchange rate is valued at USD 1 = RM3.50 or

approximately Rs 13.5 per ringgit. Foreign currencies, including

Indian rupees, can be exchanged at banks and money changers,

available at most malls and tourist areas.

Most states: Monday- Friday: 9.30 am to 4.30 pm. Saturday &

Sunday: Closed .

Kelantan & Terengganu: Sunday - Wednesday : 9.30 am to 4.30 pm.

Thursday :9.30 am to 4.00 pm. Friday/Saturday*/Public holiday:

Closed.


Indian Banks in Malaysia

Post Office

Time

Electricity

Measurement and Weight

Telephone

Bank of Baroda, UCO Bank, Indian Overseas Bank & ICICI Bank Limited have

representative Offices in Malaysia. A recent joint venture agreement has been signed

between Bank of Baroda, Indian Overseas Bank and Andhra Bank for opening a

branch in Malaysia. It is expected to be operational in early 2010.

Opening hours from 8.30 am to 6.00 pm daily, except for the first Saturdays of the

month, Sundays and public holidays. In Kelantan and Terengganu, the post office

operates on the same days, but is closed on Fridays and public holidays.

Two-and-a-half hours ahead of IST; Eight hours ahead of GMT and 16 hours ahead of

U.S Standard Time.

Voltage is 220 - 240 Volt AC at 50 cycles per second. Standard 3- pin square plugs

and socket. For appliances and mobile phone chargers from India, adapter plugs will

be required.

Malaysia follows the metric system for weight and measurement as in India.

Local calls can be made from public phones using shillings or prepaid cards.

International calls can also be made using card phones or at any Telekom office.

It can be expensive to use roaming Indian connections. Indian travellers can

purchase local phone cards, widely available.

Advantages • Overview • International Trade

• FTAs • Malaysia in ASEAN

ADVANTAGES

Malaysia is blessed with abundant natural resources, and has

effectively used its natural wealth to attain middle-income economy

status. Malaysia is a top three global producer of rubber and

produces a major proportion of the world’s palm oil. Additionally, its

plantations include cocoa, timber, pepper, sugar cane and pineapple.

While tin was an early industry, it is no longer significantly produced.

Offshore reserves of oil and gas are significant and contribute

substantially to exports and revenues. According to Petronas, the

state-owned oil and gas company, crude oil and condensate reserves

measure 5.36 billion barrels of oil equivalent, while natural gas

reserves stand at 2.4 trillion cubic metres.

As the gateway to major shipping and air routes between East and

West, Malaysia enjoys significant advantages as a trading nation in

the region.

Malaysia’s strength lies in its excellent network of trading

infrastructure, including skilled workforce, sophisticated financial

systems and transport and communications connectivity. Its

proactive pro-business investment and trade

policies have made it into a globally

benchmarked manufacturing hub. Malaysia

ranked 24th in the Global Competitiveness

Index (GCI 2009-2010) and 23rd in the World

Bank’s ‘Doing Business Report 2010’.

The country is one of the world’s largest

producers of microchips, and a leading

manufacturer of air-conditioners, rubber

gloves and palm oil. The major export

category is electrical and electronic products, which contribute

almost 40% of Malaysia’s aggregate exports. Semi-conductors, used

in a range of applications, are the biggest export item.

Eco

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8


The top advantages of Malaysia as a business destination for businesspersons from

India include:

• Stable economy and business policies

• Facilitative business environment to attract global companies

• Educated and skilled workforce with knowledge of English; 37 universities and

over 600 government and private colleges and polytechnics

• Integrated development of investment regions and transport and

communications linkages providing a business infrastructure that is among the

top in Asia

• High commitment to quality standards with an internationally-recognised

product, testing and quality certification in SIRIM Berhad, the national standards

organisation

• Export-orientation as a cornerstone of economic policy

• Regional and global engagement through trade agreements; member of

ASEAN; access to 500 million strong ASEAN market through India-ASEAN Free

Trade Agreement from January 2010

• Low-cost living and working environment

• Ease of access to workers from other countries, including India

• Proximity to India

• Presence of large Indian diaspora with common cultural and language links

The Malaysian economy has performed well over the years due to the country’s

political stability, the sound financial and economic policies adopted by the

government, and efficient management of its natural resources that include oil and

gas.

Malaysia’s GDP grew at an average rate of 5.1% in the 1960s and 7.8% in the 1970s.

In the 1980s, the Malaysian economy continued to grow, albeit at a lower average

rate of 5.9% due to the global recession in 1985 and 1986. In this period, the country

succeeded in transforming itself from a commodity-dependent economy into a

middle-income country with export strengths in technology-intensive sectors.

ECONOMY - OVERVIEW

9

The Malaysian economy grew rapidly from 1991 to 1995 at an

average rate of 8.7% per annum. The East Asian financial crisis led to

a meltdown in 1998, but strenuous measures by the government

succeeded in raising the average growth rate. In the last five years,

Malaysia has witnessed steady annual average GDP growth rate of

6%. Per capita income at PPP terms stands now at $ 13,300.

As an export-oriented economy, the country has suffered from the

global economic crisis. The first quarter of 2009 saw GDP growth

plummet to -6.2%, with 18% decline in manufacturing in Jan-Apr

2009 over the same period last year. GDP is expected to shrink by 4-

5% in 2009. The government has put in place two stimulus packages

totalling close to $20 billion.

Although the global economic crisis hit the country hard, prudent

action taken at the time of the Asian financial crisis in 1997-98 has

helped it weather the crisis. Banks are now in a strong position and

have not been threatened with collapse due to exposure to toxic

assets. Share prices mirrored global equity trends during the worst of

the crisis period but showed signs of recovery as optimism grew and

commodity prices firmed up from the latter half of 2009.

Along with the measures on the fiscal front to stimulate the economy,

the central bank, Bank Negara lowered the benchmark interest rate

by 125 basis points to 2.0% in stages, the biggest drops since 1998.

The Bank also offered to guarantee all deposits, including in foreign

currency, at financial institutions until 2010.

As per the central bank’s second quarter review, the economy’s pace

of negative growth decelerated to -3.9% due to higher public

spending and positive growth in private consumption. The economy

experienced better performance across all sectors in the second

quarter. Services recorded positive growth, led by finance and

insurance, trade and real estate and business services. The

construction sector benefited from the stimulus packages, and the

manufacturing sector recorded slower contraction of -14.5% from -

17.9% the previous quarter. Agriculture rebounded into positive

territory, led by smaller decline in industrial crops and strong

Global Economic Crisis

10


production of food crops. In the mining sector, contraction moderated to -2.6% from -

5.2% in Q1.

On the external front, exports declined due to lower commodity prices and lower

global demand. While exports narrowed by -26.3% in Q2, imports declined by 23.7%.

The trade balance came down from RM 32.7 billion to RM 26.5 billion.

The four main thrusts of economic policy are energy, natural resources or plantation

crops, electronic manufacturing and financial services. Malaysia is positioning itself

as a hub for Islamic financial services, which accounted for around 17-18% of banking

assets in 2009. This has helped attract business and investments from oil-rich Gulf

states.

The electronics manufacturing sector has been promoted in the north around Penang

island. Electronic assembly has been a key sector, with major global players setting

up plants for exports. The sector reported heavy loss of jobs and shortened work

week to cope with the economic crisis. Unemployment in the manufacturing sector is

expected to continue into 2010.

Small and medium enterprises comprise 99.2% of commercial businesses and

contribute a third of GDP and 19% to exports. SMEs face hurdles in accessing finance

and labour, despite several promotional schemes.

The 9th Malaysia Plan 2006-2010 aims at lifting people out of poverty under the long-

term goal of becoming a developed country by 2020. Low-cost housing,

infrastructure, education and health care have been priorities, among others.

Redressing ethnic inequalities has been a focus area as well, specifically to raise

Malay ownership in equity. 9MP goals are: to move economic activity from basic tasks

to greater value-addition in services and knowledge-based industries; improve

education and training; address social and economic iniquities; better quality of life;

and strengthen institutional capacity. Biotechnology is a special focus with the aim to

create 20 biotech companies of global standards.

The new government from April 2009 took several initiatives to further liberalise

certain sectors of the economy to invite greater overseas investments and boost

competitiveness. 27 service sectors were liberalised with no equity conditions,

covering the areas of health and social services, tourism services, transport services,

Economic Priorities

Recent Initiatives

11

business services and computer and related services. A National

Committee for Approval of Investments in the Services Sector has

been established under MIDA. This Committee will receive and

process applications of investments in specified services sectors.

In June 2009, far-reaching changes were made to the New Economic

Policy. The 30% bumiputera quota requirement for companies

seeking to list on the Malaysian stock exchange, Bursa Malaysia, was

removed and the Foreign Investment Committee effectively diluted.

Other measures included:

• All property transactions, except for those involving a dilution of

government or bumiputera interests for property valued at

RM20mil and above, would no longer require FIC approval;

• All Malaysian companies seeking listing would have to offer 50%

of their public offering to bumiputera investors, which would work

out to 12.5% of the total stake;

• A 100% ownership would be allowed for qualified and leading

fund management companies to set up operations in Malaysia;

• Foreign equity in existing stock-broking companies would be

increased to 70% from 49%;

• All transactions on mergers and takeovers by local or foreign

companies will no longer need FIC approval; and

• All listed companies need not maintain 30% bumiputra equity as

required previously.

12

Executive Directors commended the Malaysian authorities for sound macroeconomic management in difficult circumstances, and observed that Malaysia is well positioned to weather the severe impact of the global downturn. A strong external position, robust balance sheets of household and corporate sectors, and sound financial system should lessen the blow from adverse external shocks.

Directors agreed that the countercyclical fiscal response has been appropriately large, and should mitigate the impact of output contraction on households and businesses. They saw some limited room for additional stimulus if the downturn proves longer or deeper than expected. At the same time, noting the high prospective budget deficits and a rising debt to GDP ratio, they strongly encouraged the authorities to cast any future fiscal decisions in a medium-term framework. Directors highlighted that the necessary steps to reduce medium term fiscal risks include broadening the non oil tax base, moving ahead with subsidy reform, and putting fiscal policy on a credible consolidation path.

IMF Executive Board Assessment August 14, 2009.


13

Chart – Growth of GDP and Sectoral Growth 2000-2007

8.9

0.5

5.4 5.8

6.8

55.9 6.36.1

-0.2

2.9

6

4.7

2.6

5.2

2.2

13.6

-2.6

4.2

7.5 7.3

3.4 4.93.3

6

4.1

5.8

4.2

6.4

6.87.4

10

-4

-2

0

2

4

6

8

10

12

14

16

2000

2001

2002

2003

2004

2005

2006

2007

GDP Agriculture Industry Services

Source: Asian Development Bank

Table I - Select economic indicators 2008 est.

Source: CIA World Fact book, MITI

GDP Value

Purchasing power parity US$ 386.6 billion

Real GDP growth rate 4.6 %

Per Capita GDP US$ 7878

Composition by sector (2008)

Agriculture 7.6%

Industry 37.4%

Services 55.0%

14

Rankings

Source: CIA World Factbook

Table II - Industrial and agricultural production

Source: CIA World Factbook

Region Industries Agriculture

Peninsular Rubber and oil palmMalaysia processing & manufacturing

Petroleum refining Palm Oil

Light manufacturing industry Cocoa

Electronics Rice

Chemicals

Machinery and appliances

Sabah Logging Subsistence crops

Petroleum production Rubber

Timber

Coconuts

Rice

Sarawak Agriculture processing Rubber

Petroleum production and refining Pepper

Logging Timber

Rubber

Index Ranking

Doing Business Report 2009

• Getting credit (top ranked) 1

• Dealing with construction permits 104(lowest ranked)

World Competitiveness Report (IMD, Switzerland) 18 of 57

• Countries with GDP per capita of less than 1 of 29$20,000

Global Competitiveness Index 2009-10 24 of 133(World Economic Forum)

AT Kearney Global Services Location Index 2009 3

AT Kearney FDI Confidence Index 2007 16

AT Kearney/Foreign Policy Magazine Globalisation 8 of 62Index - Economic Ranking 2004

Corruption Perception Index 2008 Transparency International 47 of 180

20 of 181 countries


INTERNATIONAL TRADE

Exports

Malaysia has excelled in transforming into a dynamic and valuable trade partner for

the world. Undertaking systematic policies to build a manufacturing ecosystem along

with attendant logistics, finance and trade facilitation infrastructure, Malaysia is now

well-entrenched as a global trader. Although its share of global exports stands at

1.26%, this is in excess of the size of its population and GDP.

Malaysia’s export-to-GDP ratio was 118% in 2008, indicating its trade openness.

Malaysia’s exports in 2008 were worth US$ 195.7 billion f.o.b and included electrical

and electronic products (by far the largest export item at close to 40% of aggregate

exports), palm oil, crude petroleum, chemicals and chemical products, refined

petroleum products, liquefied natural gas, machinery and appliances and parts.

The top export destinations in 2008 were Singapore, USA, Japan, China and

Thailand. India is ranked 8th in the export profile with a share of 3.75% of Malaysia’s

aggregate exports.

Malaysia ranked 20th in global exports in 2007, and 25th in global imports. In services

trade, it came in 30th for both exports and imports.

15

Source: MITI

Exports by Major Products, 2008

Imports

Malaysia’s imports in 2008 were worth US$ 156.2 billion f.o.b. and

included electrical and electronic products, chemicals, machinery,

petroleum products, metal manufactures, etc. Again, the first

category of E&E contributes a major share of imports.

The top sources of imports for Malaysia in 2008 were China, Japan,

Singapore, USA and Thailand.

16

Export Destinations, 2008

Export Destinations, January - December 2008 (RM 663 Billion)

Source: MITI


17

Imports by Major Products, 2008

Source: MITI

Import Sources, 2008

Source: MITI

Electrical &Manufactures

of Metal

18

Total annual FDI flowsin US$ million

FDI FlowsUS$ million

1990-2000 2003 2004 2005 2006 2007(Annual average)

Inward 4,722 2,473 4,624 3,967 6,048 8,403

Outward 1550 1,369 2,061 2,971 6,041 10,989

Source: World Investment Report 2008, United Nations Publications

Malaysia and WTO

FDI in Malaysia

Malaysia has been a member of WTO since 1995. According to WTO,

its profile of tariffs is as below:

Tariffs and duty free imports

Tariff binding coverage (%) 83.7

MFN tariffs Final bound Applied 2007

Simple average of import duties

All goods 24.5 8.4

Agricultural goods (AOA) 76.0 11.7

Non-agricultural goods 14.9 7.9

Non ad-valorem duties 2.8 0.7

(% total tariff lines)

MFN duty free imports (%, 2006)

in agricultural goods (AOA) 75.6

in non-agricultural goods 79.4

Services sectors with GATS commitments 73

Source: WTO

Malaysia attracted $12.9 billion worth of FDI in 2008, a growth of 53

per cent over the previous year and the highest in the region. It is

ranked 19th in the World Competitiveness rankings. The sectors

which received the highest FDI were oil and gas, basic metals,

electrical and electronics, chemicals and food manufacturing.


Malaysia’s outward investments have surged in the previous years, owing to

internationalization of local companies and search for overseas markets. Companies

are involved in construction and project work as well as manufacturing in many

regions of the world, particularly Gulf, South East Asia, China and India.

Although Malaysia supports fair and equitable multilateral trade under WTO, it has

been active on regional and bilateral trade negotiations. With India, the ASEAN-India

FTA is to be implemented from January 2010, a bilateral Comprehensive Economic

Cooperation Agreement is also in the process of negotiation.

19

Status of FTA Negotiations

Source: MITI

Status/Type Regional Bilateral

Concluded • ASEAN Free Trade Area (AFTA) • Malaysia-Japan Economic

Regional: 9 • ASEAN Economic Community Partnership Agreement

Bilateral: 2 • ASEAN-China • Malaysia-Pakistan

• ASEAN-ROK Comprehensive Economic

• ASEAN-Japan Comprehensive Partnership Agreement

Economic Partnership

• ASEAN-India (Goods)

• ASEAN-Australia-New Zealand

• TPS-OIC and D-8 PTA

Under Negotiations • ASEAN-EU Malaysia-US

Regional: 3 • ASEAN-China Malaysia-Australia

(2nd Services Package) Malaysia-Chile

Bilateral: 5 • ASEAN-India Malaysia-New Zealand

(Investment and Services) Malaysia-India

MALAYSIA IN ASEAN

In 2008, Malaysia was the third largest economy in ASEAN after

Indonesia and Thailand in US dollars at current prices. Its per capita

income ranked third after Singapore and Brunei Darussalam.

Malaysia ranked second in total exports among ASEAN countries after

Singapore, and intra-ASEAN exports make up over a quarter of its

aggregate. It comes in third in terms of aggregate imports after

Singapore and Thailand. It receives 13.4% of the region’s net FDI

inflow.

Intra-ASEAN trade relations are robust and expanding. The ASEAN

Trade in Goods Agreement is to be in place by October 2009 with the

intention of forming an ASEAN Economic Community by 2015. This will

make ASEAN a single market and production base with a free flow of

goods, services, investment and labour. Trade barriers will be reduced

to encourage competitiveness and trade facilitation measures will be

carried out to make the procedures transparent and simple.

ASEAN is a market of over 580 million consumers and rapidly growing

incomes with a GDP of $1.5 trillion. Due to geographical proximity and

vast historical and cultural linkages, India enjoys high recognition and

brand image in ASEAN. This is a good foundation for extending

economic engagement with the grouping. Malaysia as a middle-level

economy and excellent regional connectivity offers a good low-cost

base for Indian companies to address the ASEAN markets.

Source: ASEAN Secretariat

Source : ASEAN Merchandise Trade Statistics Database (compiled/computed from data submission, publications and/or websites of ASEAN Member States' national ASEAN Free Trade Area (AFTA) units, national statistics offices, customs departments/agencies, or central banks).

Symbols used Notes • not available as of publication time • Some figures may not sum up to totals due to

rounding off errors.

n.a. not applicable/not available/not compiled p/ 2008, preliminary data with Cambodia being estimated using trade growth as used in World Bank :

Data in italics are the latest updated/revised figures from previous posting.

World Bank Economic update for the East Asia and Pacific Region, April 2009:1. Order is based on the share of ASEAN trade with partner countries to total ASEAN trade.2. Includes trade of all other countries and those that could not be attributed to specific countries.


21

ASEAN Top ten export markets and import origins, 2008

as of 15 July 2009value in US$ million; share in percent

Export market Import origin1/ 1/

Country of destination Value of exports Share to total Country of origin Value of Imports Share to total

ASEAN 242,460.4 27.6 ASEAN 215,579.8 25.9

European Union-25 112,948.3 12.8 Japan 107,116.4 12.9

Japan 104,871.8 11.9 China 106,976.6 12.9

USA 101,457.5 11.5 European Union-25 89,554.7 10.8

China 85,556.5 9.7 USA 79,735.8 9.6

Republic of Korea 34,937.5 4.0 Republic of Korea 40,783.9 4.9

Australia 33,682.1 3.8 Australia 17,907.7 2.2

India 30,082.8 3.4 India 17,329.1 2.1

Hong Kong 16,456.8 1.9 Saudi Arabia 11,712.4 1.4

Taiwan, Taiwan,Province of China 9,838.4 1.1 Province of China 14,116.3 1.7

Total top ten Total top tendestination countries 772,292.2 87.8 origin countries 700,812.6 84.3

Others2/ 106,850.4 12.2 Others2/ 130,416.5 15.7

Total 879,142.6 100.0 Total 831,229.1 100.0

22

Exports by Malaysia to ASEAN Countries, 2008

Imports by Malaysia from ASEAN Countries, 2008

Source: MITI

Source: MITI


Bilateral Relations

Trade • Potential Sectors • Investment • Bilateral Treaties

and Agreements • ASEAN-India FTA

INTRODUCTION

BILATERAL TRADE

India and Malaysia have enjoyed commercial links and cultural exchanges dating

back to the pre-Christian era. In modern times, bilateral relations have been close and

friendly. In recent years, India-Malaysia relations have diversified and developed in

an all-round manner, involving frequent high-level exchanges, burgeoning economic

engagement, growing cultural, educational and people-to-people links, rapid

expansion of tourism, and increasing defence exchanges and cooperation. The

Government of India has accorded a high priority to relations with Malaysia in the

context of its Look East Policy. Likewise, the Malaysian Government has been

increasingly proactive in nurturing closer ties with India.

The first Indian joint venture, Godrej commenced operations in 1968, and in the

seventies and early eighties Malaysia hosted the largest number of Indian joint

ventures in any country. The present involvement of Indian companies in Malaysia is

extensive in many sectors, while Malaysian companies are increasingly active in

India.

The impressive progress of the Malaysian economy since the late eighties, the new

self-confidence of Malaysian entrepreneurs, and the liberalization of the Indian

economy since 1991 have triggered new dimensions in bilateral commercial and

economic relations.

Malaysia is India’s second most important trading partner amongst the ASEAN

countries and also India’s gateway to ASEAN and China. India is the largest trading

partner for Malaysia in South Asia and the 12th largest among Malaysia’s foreign

partners

In 2007-08, Malaysia moved up as India’s second largest export partner in ASEAN, as

well as its second largest source of imports from ASEAN. For Malaysia, India is the

8th largest export destination, but does not rank as a top ten source of imports.

23

Source: Directorate General of Foreign Trade, Government of India

Bilateral trade trends

2.52

0.75

6.01

1.47

8.53

2.21

0

1

2

3

4

5

6

7

8

9

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Year

US

$b

illio

n

Export Import Trade

24

Bilateral trade in 2007-08 reached a record level of US$ 8.5 billion.

India’s export growth to Malaysia nearly doubled from $ 1.3 billion in

2006-07 to $ 2.5 billion in 2007-08; however, the growth of imports

has been more spectacular, expanding to $ 6 billion in 2007-08.

According to Malaysian statistics, bilateral trade crossed $10 billion in

2008, with exports to Malaysia at $3.1 billion and imports from

Malaysia at $7.4 billion.

Malaysian Exports to India(Million US$)

Source: High Commission of India

Commodity Group 2002 2003 2004 2005 2006 2007 2008

1 Food Items 8.13 11.57 18.98 37.12 27.38 30.07 29.36

2 Beverage & Tobacco 0.29 1.00 1.23 1.57 3.24 4.84 4.61

3 Crude Materials 118.17 179.05 183.10 223.03 219.73 263.24 1094.38

4 Mineral Fuels 448.92 818.37 1061.29 1800.55 2765.28 2698.24 3559.54

5 Animal & Veg. Oils 607.91 720.63 460.43 288.03 261.35 372.07 754.19

6 Chemicals 131.16 225.82 286.88 380.52 460.07 545.98 635.61

7 Manufactured Goods 86.25 95.88 160.21 229.72 298.04 466.50 483.9

8 Machinery &

Trans. Equipment 315.09 394.30 750.58 885.60 1003.34 1436.23 1388.7

9 Misc. Manufactures 34.19 50.63 58.97 94.10 142.48 170.03 192.96

10 Other Misc. 36.86 35.04


According to Malaysian figures, Malaysia’s

exports to India in 2008 stood at $7421.6

million, an expansion of more than four

times since 2002.

About half of aggregate was contributed by

mineral fuels, followed by machinery and

transport equipment and crude materials.

This reflects India’s dependence on

Malaysia for vital items such as crude palm

oil and crude petroleum. The high

proportion of machinery and transport

equipment in India’s import profile indicates

Malaysia’s significance as a source of

manufactured items for India as well.

25

Indian Exports to Malaysia(Million US$)

Commodity Group 2002 2003 2004 2005 2006 2007 2008

1 Food Items 199.13 219.46 436.39 307.83 336.76 488.08 921.4

2 Beverage & Tobacco 0.60 0.99 1.38 2.81 7.58 7.48 11.98

3. Crude Materials 36.72 39.95 50.07 47.78 67.23 74.78 146.05

4 Mineral Fuels 1.84 3.44 54.95 12.26 30.85 166.89 237.44

5 Animal & Veg. Oils 3.86 2.35 7.05 7.58 11.63 22.73 126.39

6 Chemicals 82.89 102.26 163.35 201.00 258.12 280.87 330.43

7 Manufactured Goods 145.78 168.71 255.0 287.90 364.17 683.06 936.64

8 Machinery &Trans.

Equipment 119.76 89.61 253.35 165.57 205.72 290.98 400.19

9 Misc. Manufactures 30.5 25.6 42.56 46.81 46.12 60.36 66.11

10 Other Misc. 22.21 19.91 24.67 24.92 28.51 33.30 17.82

Total: 643.4 672.5 1288.8 1104.5 1356.7 2108.5 3105.9

Source: High Commission of India

26

INDIA 'S E X P OR T S T O MA L A YS IA : P RODUC T -WIS E

(in millio n US D)

488.08

7. 48

74.78

166.89

22.73

280.87

683.06

290.98

60.36 33.3

921.4

11.98

146.05

237.44

126.39

330.43

936.64

400.19

66.1117.82

1 2 3 4 5 6 7 8 9 10

2007 2008

INDIA 'S IMP OR T S F R OM MA L A Y S IA : P R ODUC T -WIS E

(in mill ion US D)

30.07 4.84

263.24

2698.24

372.07545.98 466.5

1436.23

170.0336.8629.36 4.61

1094.38

3559.54

754.19635.61

483.9

1388.7

192.9635.04

1 2 3 4 5 6 7 8 9 10

2007

20 08

India’s exports to Malaysia have grown by almost five times from

2002 to 2008. Manufactured items and food are the largest

components of exports, while machinery and transport equipment

and chemicals are also prominent exports.

S.No. Commodity Group S.No. Commodity Group

1 Food Items 6 Chemicals

2 Beverage & Tobacco 7 Manufactured Goods

3 Crude Materials 8 Machinery &Trans. Equipment

4 Mineral Fuels 9 Misc. Manufactures

5 Animal & Veg. Oils 10 Other Misc.


27

Top Ten Exports of India to Malaysia (with HS Code) $ million

HS Code Item 2007-08 2008-09 April-Dec

74 Copper and articles

- Of which

- 74031100 Cathodes 205.22

- 74081190 Wires 14.13

10 Cereals

- Of which Corn 281.12 229.03

218.49

29 Organic chemicals 158.07 165.99

- Of which

- 29012400 Isoprene 74.08

- 29024300 P-xylene 15.30

27 Mineral fuels, etc 454.38 119.42

- Of which

- 27101950 fuel oils 51.72

76 Aluminium and articles 83.42 91.19

84 Boilers, machinery, and mechanical appliances 125.15 88.73

02 Meat and edible meat offal 96.17 83.39

73 Articles of iron and steel 58.55 72.33

79 Zinc articles 9.10 61.74

23 Prepared animal fodder 31.9 55.51

Total exports 2568.84 2027.95

300.44 230.14

Going by HS Codes data available from Directorate General Foreign Trade, India,

the ten top items of exports to Malaysia in April-December 2008-09 are given in table

below.

28

POTENTIAL EXPORT PRODUCTS $ million

HS Code Item Malaysia’s Total

Imports 2006 Exports 2006

India’s Total

85 Electrical and electronics

8536 Fuses and switches, etc 1399 233

8541 Diodes, semiconductor devices, etc 2817 178

8529 TV parts 1656 155

84 Boilers, machinery and parts

8414 Air, vacuum pumps 503 289

8471 Automatic data processing machines 2855 205

8473 Parts of computer & office machinery 7138 198

39 Plastics and articles

3902 Polymers of propylene 145 568

3907 Polyacetal, etc 717 427

3901 Polymers of ethylene 644 379

3920 Sheets, film etc. 77 359

87 Vehicles and parts

8703 Cars 1365 1133

8708 Vehicle parts 986 1257

8704 Trucks 299 192

71 Pearls, precious stones, etc 1930 16059

72 Iron and steel

7219 Flat rolled products of stainless steel 524 395

7210 Flat rolled products of iron clad 502 1687

7208 Flat rolled products of iron not clad 471 1012

74 Copper and articles 2574 3035

73 Articles of Iron and steel

7305 Tubes and pipes nes 497 641

7304 Tubes and pipes 465 263

7318 Screws and bolts 230 196

29 Organic chemicals 2387

2905 Acyclic alcohols 282 132

2902 Cyclic hydrocarbons 539 1321

Source: Intracen


Indian exports to Malaysia are highly diversified and consist mostly of manufactured

exports.

However, India is not a significant supplier to Malaysia in the commodities which

figure high in India’s export profile such as gems and jewellery, organic chemicals,

machinery and mechanical appliances, apparel and automotives.

India is also not a significant supplier in commodities which are high in Malaysia’s list

of imported goods, such as electrical goods, plastics, iron and steel, optical and

medical equipment, etc.

An analysis of Malaysia’s top import items and India’s exports in these items reveals

that the above products can be exported by India to Malaysia.

Malaysia has become a significant investor in India in the last few years. According to

official figures, FDI from Malaysia from April 2000 to March 2009 was US$ 214.77

million, placing it at 24th position. However, this figure is understated as the majority

of investments are routed through third countries, and actual and pipeline FDI is worth

several billion dollars.

Malaysian foreign direct investment in India is primarily focused on roads and

highways, telecommunications, oil and gas, power plants, tourism and human

resources. The highest investment proposals have been in the Fuels (power and oil

refinery) sector, followed by Telecommunications and Roads & Highways.

According to the High Commission of India, Kuala Lumpur, recently, there has been a

surge in Malaysian private sector initiatives in project-related investments into India.

Notable among these are the following:

• Ranhill Bhd.’s US$ 900 million contract for construction and commission of a

2x350 MW thermal power plant in Chhattisgarh;

• Mudajaya Group Berhad’s US$ 150 million E&P power project related contract in

Chhattisgarh;

INVESTMENTS

Malaysian Investments in India

29

• Asian Gateways Construction Sdn Bhd’s US$ 1.4 billion mega

thermal power project (1600 MW) in Andhra Pradesh, Power

Purchase Agreement (PPA) for which was signed with PTC India

Ltd. in July 2007;

• 9.87% stake acquired by Khazanah Nasional Berhad, the

investment arm of the Malaysian Government, in Infrastructure

Development Finance Company (IDFC) making them the

second largest share holder in IDFC after the Government of

India, which holds a 23% stake. It also has 12.85% stake in

Apollo Hospitals and 4.71% stake in Yes Bank.

• Sunway Group’s joint venture in June 2007 with the Hyderabad

based Opus Developers & Builders to develop a 35-acre

township, SunCity in Andhra Pradesh, with around 3,400 units of

high quality condominiums & their another JV with MAK Projects

Private Ltd to develop an RM 380 million (US$ 113.43)

condominium project in Hyderabad;

• UMW Holdings Bhd’s acquiring 14.9% stake in BSE-listed Oil

Country Tubular Ltd (OCTL) for RM 41.96 million (US$ 12.16

million) through its Indian arm UMW India Ltd.;

• IJM Corp. Bhd and IDFC’s joint venture to develop a southern

road project at a cost of Rs. 6.75 billion;

• Petronas has raised its stake in Cairn India to 12.7% from 9.93%

with acquisition of more shares, thus increasing value to US$

625 million (Rs. 2,534 crores) in March 2008;

• Malaysia Airports Holdings Bhd (MAHB) has 11% and 10% stake

respectively in Rajiv Gandhi International Airport (RGIA) in

Hyderabad that went into operation in March 2008 and the Indira

Gandhi International Airport (IGIA).

• India’s largest mobile phone service provider Bharti Airtel Ltd.

and Malaysia’s Global Transit Limited are part of a six member

consortium to build a high bandwidth undersea fibre-optic cable

linking Asia and the USA at a total estimated cost of US$ 300

million.

30


• UMW Corporation Sdn Bhd, a subsidiary of UMW Holdings Bhd has entered into

two separate share sale agreements in 2008 for acquiring a 51% stake in MK

Auto components Ltd for US$ 22.52 million and 50% in MK Automotive

Industries Ltd for US$ 1 million approximately.

• Malaysian construction firm, UEM Builders Bhd, have set up an equally owned

joint venture company in partnership with India’s Ansal Group, called UEM

Builders-Ansal API Contracts Pvt. Ltd., with the objective of working jointly on

several upcoming construction projects in India, particularly those related to real

estates and township development.

• Sime Darby Plantation Sdn Bhd, a wholly owned subsidiary (WOS) of the Sime

Darby Berhad, signed a Memorandum of Understanding (MoU) with the State

Trading Corporation (STC) of India on 26 August 2008 to cooperate in the field of

edible oils. Under the agreement, both sides would explore the possibility of

setting up a joint venture to set up an edible oil refining facility and market the end

products in India.

• IJM Steel Products Private Ltd, an Indian subsidiary of IJM Group has

commissioned an RM 16 million (US$ 4.9 million) welded wire mesh(WWM)

manufacturing facility at Isnapur, near Hyderabad.

• Tune Hotels Regional Services Sdn Bhd entered into a strategic partnership with

Apodis Hospitality Corporation of India to invest in, develop and operate 20 Tune

Hotels across India by 2012. It has plans to develop 70 hotels in India within

seven years.

According to the Construction Industry Development Board (CIDB) of Malaysia,

Malaysian companies have so far completed 52 construction projects worth US$ 2.34

billion in India, while 22 projects valued at US$ 2.3 billion are currently under various

stages of implementation. Other notable projects in construction as well as other

sectors underway include:

• Scomi Engineering Bhd is part of a consortium led by India’s Larsen & Toubro Ltd

that has been awarded the RM 2 billion monorail project in Mumbai.

• Ranhill Utilities Bhd (RUB) will partner with India’s Jusco Group and

Infrastructure Development Finance Co (IDFC) to lease and build water

treatment plants in West Bengal.

Malaysian Projects in India

31

• IJM Corp. Bhd, through its special purpose vehicle Vijayawada

Tollway Pvt Ltd, has embarked on a major highway project worth

nearly RM 500 million (US$ 156.7 million) in Andhra Pradesh.

• An MOU was concluded between the Government of Kerala and

Construction Industries Development Board (CIDB) of Malaysia

in September 2008 for development of an ‘Integrated Medical

City’ at Kenalur, Kozhikode by a Malaysian consortium and is

expected to cost US$ 120 million. It will consist of a medical

university, hospital, nursing school, dental college and health

services.

According to the High Commission of India, over 100 Indian

companies including 61 Indian joint ventures are operating in

Malaysia. Cumulative Indian investment in Malaysia (from 1980 to

2007) is estimated to be over US$ 1.58 billion. During this period,

India was the 7th largest investor in Malaysia. Indian investments in

Malaysia in 2007 alone are in excess of US$ 1 billion. The acquisition

by Reliance Industries Limited of the assets of Hualon Corporation in

September 2007, take-over of Sabah Forest Industries by Ballarpur

Industries Limited of the Thapar Group in March 2007 and the Larsen

& Toubro buy-out of the switchgear business of Tamco Corporate

Holdings Bhd is likely to set the tone for other Indian corporate entities

looking for investment opportunities in Malaysia.

Since 1996, a new dimension in the India-Malaysia relationship is the

co-operation in Information Technology and human resource

development. There are 67 Indian companies operating in Malaysia’s

prestigious Multimedia Super Corridor.

In September 2007, Satyam (now ‘Mahindra Satyam’) unveiled its

new state-of-the-art 500-seat Global Solutions Centre (GSC) in

Cyberjaya as part of the Company’s ambitious plans to expand its

Malaysian operations into developing its largest software

development hub outside India.

Areas of operation for Indian companies are information technology,

biotechnology, manufacture of textiles and yarn, palm oil refining,

Indian Investments in Malaysia

32


manufacture of drugs and pharmaceuticals, automobile associated

activities, specialty chemicals, steel furniture and rubber products.

Some of the other notable investments/JVs as well as Malaysian

projects awarded to Indian companies during 2008 include:

• India’s Punj Lloyd Ltd is part of a consortium awarded the job of

building a 512 km natural gas pipeline from the proposed

Sabah Oil and Gas Terminal in Kimanis to Petronas’ liquefied

natural gas complex in Bintulu (East Malaysia).

• Wipro has expanded its Malaysian operations by launching a

Global Service Management Centre (GSMC) in Cyberjaya in

February 2008.

• Hyderabad-based Vivo Bio Tech Ltd is to invest RM 450 million

(US$ 140.6 million) in the setting up of an integrated

biotechnology facility in Malacca to commercialize bio-

therapeutics in Malaysia.

• Malladi Group has announced in October 2008 its plans to invest US$300 million

over the next 3 to 5 years to create a global one-stop shop encompassing entire

value chain in contract manufacturing facility in bio-technology in Malaysia;

• India’s Reliance Capital Asset received an Islamic fund management license

from Malaysian Government in November 2008.

• Hextar Chemicals Sdn Bhd, Kuala Lumpur and Unitop Chemicals Pvt. Ltd,

Mumbai entered into a joint venture in January 2008 to make specialty chemicals

for the agriculture, oil and gas, textile and personal care products industries. The

Plant, known as Hextar Unitop Chemicals Sdn Bhd, will be built in two years’

time at a cost of RM 10 million (US$ 2.99 million).

• Malaysia’s MNC Wireless Berhad and India’s Cellebrum.Com Ltd, a subsidiary

of Spice Corp Ltd, established a strategic partnership that entails marketing

Cellebrum.Com’s mobile platforms, distribution rights, marketing in collaborative

areas and co-development in the areas of research & development.

• Hyderabad-based Goldstone Technologies Ltd. launched its Internet Protocol

Television (IPTV) service in Malaysia to take advantage of the growing audience

market. Partnering with MOL Access Portal Bhd., Goldstone’s focus will be on

South Indian content, particularly movies.

• Reliance Anil Dhirubhai Ambani Group’s Adlabs Films Ltd has expanded into

Malaysia with the acquisition of a majority stake in the Lotus Five Star Cinemas.

With the Adlabs acquisition, Lotus has emerged as the third largest chain in

Malaysia, operating 51 cinema halls spread all over Malaysia.

33

• Aban Offshore Ltd, Mumbai has been awarded two contracts

worth US$ 55 million in all to drill nine oil wells in Malaysia.

• The Embassy Group of India in partnership with the Emkay

Group of Companies of Malaysia have officially opened the

Block A of their MKN Embassy TechZone project worth RM 350

million (US$ 109.7 million) in Malaysia.

Indian public sector undertakings have an impressive track

record in Malaysia, with HMT, EIL, BHEL, IRCON and IOC

having been actively engaged with the Malaysian industrial

sector since the 1970s. A few highlights are as follows:

• IRCON International Ltd. (a company under the Ministry of

Railways, GOI) has been actively engaged in the development

of railways in Malaysia since 1988. It has successfully

undertaken track rehabilitation, track and bridge work,

refurbishment of KTMB’s 22 class locomotives. It has completed

and commissioned 11 major railway projects valued about RM

694.7 million. IRCON is supplying locomotives on hire and

maintenance basis to KTM Berhad (Malaysian Railway) since

July 1993. IRCON was recently awarded the Seremban –

Gemas Railway Double Tracking Project worth over US$ 1

billion. This is its largest project overseas.

• BEML Limited, Bangalore set up its International Warehouse-

cum-Branch Office in Malaysia in October 2007.

The legal framework governing bilateral trade and economic

cooperation includes a Trade Agreement signed in October 2000 and

a Double Taxation Avoidance Agreement signed in May 2001. Other

economic agreements signed include Bilateral Investment Promotion

and Protection Agreement, Air Services Agreement, Agreement for

Cooperation in the field of Science & Technology and Memorandum

of Understanding on Cooperation in Information Technologies and

Services.

India-Malaysia Joint Commission, chaired by the respective Foreign

Ministers reviews overall bilateral cooperation, including trade and

economic cooperation. The fourth session of the Malaysia-India Joint

Commission Meeting was held in New Delhi in February 2007.

BILATERAL TREATIES AND AGREEMENTS

34


Report of the Joint Study Group

CECA TNC Meetings

The India-Malaysia Joint Study Group on the Feasibility of Establishing a

Comprehensive Economic Cooperation Agreement between India and Malaysia

brought out its report (commerce.nic.in) in August 2007. It recommended that the

CECA cover trade in goods, trade in services, investments and measures for

promoting other areas of bilateral cooperation.

The JSG suggested that India’s exports to Malaysia could go up to $5 billion by 2012,

while exports from Malaysia to India could touch $11 billion. The overall welfare gains

could range from $662 million to $2.24 billion. The study highlighted that the

prospects for bilateral trade were good due to the comparative advantages, trade

complementarities, possibilities of intra-industry trade and economic capacities of the

two countries, and stressed that the range of products traded must be expanded.

For the services sector, given the dynamism in the sectors of both economies, the

JSG included the areas of medical, healthcare and diagnostic services, advertising,

audiovisual services, education services, computer, IT and telecommunications,

financial services, tourism and travel, transport, architectural, construction and

engineering services, distribution services, and accounting and taxation services.

The JSG also highlighted the opportunities in investments.

India and Malaysia are engaged in finalizing a Comprehensive Economic

Cooperation Agreement (CECA) encompassing trade in goods, trade in services,

investment and other areas of bilateral cooperation. Discussions are going on

simultaneously on all the areas mentioned above. Two meetings of the CECA Trade

Negotiating Committee (TNC) were held in February and June/July 2008 in Kuala

Lumpur. There have also been discussions through video-conferencing. The next

formal meeting of the TNC will take place in November 2009.

India-Malaysia bilateral cooperation has particularly intensified in the defense

cooperation field following high-level visits. Additionally, a Memorandum of

Understanding (MoU) between India and Malaysia on Employment of Workers was

signed in January 2009 and discussions are underway on labour issues, while

cultural interaction has benefited from increased exchanges.

35

INDIA-ASEAN FTA

India and ASEAN Free Trade Agreement for Goods was signed on 13

August 2009 and will be implemented from January 1, 2010. As per

the agreement, tariffs will be progressively lowered to a maximum of

4% over the next three to nine years on most products, excluding

sensitive items. The FTA will integrate a market of 1.7 billion people,

and allow Indians to access a potential market of $1.1 trillion in South

East Asia.

As part of the Comprehensive Economic Cooperation Agreement,

the Trade in Goods Agreement will integrate the two globally

important economic blocks for mutually beneficial economic gains.

ASEAN is a major trading partner for India and accounts for about

10% of its global trade. In the last financial year, bilateral trade

between India and ASEAN was more than US $40 billion. India and

ASEAN have set an ambitious target of achieving bilateral trade of US

$ 50 billion by 2010.

The Trade in Goods agreement focuses on tariff liberalization on

mutually agreed tariff lines from both the sides and is targeted to

eliminate tariffs on 80% of the tariff lines accounting for 75% of the

trade in a gradual manner starting from 1st January, 2010. The

Agreement has provided flexibilities to India and ASEAN countries to

exclude some of the products from the tariff concessions or

eliminations to address their respective domestic sensitivity. India on

its part has excluded 489 items from the list of tariff concessions and

590 items from the list of tariff elimination to address sensitivities in

agriculture, textiles, auto, chemicals, crude and refined palm oil,

coffee, tea, pepper etc. ASEAN countries have also maintained

similar exclusion list from the proposed tariff concessions or

eliminations.

The exchange of tariff concessions between India and the ASEAN

member countries would lead to growth in bilateral trade and

investment resulting in economic benefits to both sides. Indian

exporters of machinery and machine parts, steel and steel products,

agriculture products such as oilcake, wheat and buffalo meat, auto

components, chemicals and synthetic textiles would gain additional

market access as a result of tariff liberalisation by ASEAN. Indian

36


manufacturers would also be able to source products at competitive prices from the

ASEAN countries.

The Agreement also provides for bilateral safeguard mechanisms to address sudden

surge in imports after the Agreement comes into force. In such an eventuality if it hurts

a domestic industry, safeguard measures including imposition of safeguard duties

may be put in place for a period up to 4 years. The flexibility to invoke the safeguard

measures will remain available for both the sides for a period of 7 years to 15 years

from the date the Agreement comes into force. The signing of the Agreement signals

India’s firm commitment to its ‘Look East’ policy of building upon its historical links with

the countries of the Southeast Asian region and further deepening and widening this

partnership.

Malaysia, under the ASEAN-India FTA Agreement, will eliminate import duties on

6,792 tariff lines or products in the normal track (1) beginning Jan 1, 2010, and ending

on Dec 31, 2013, as well as 1,266 tariff lines in the normal track (2) beginning Jan 1,

2010 and ending Dec 31, 2016. The import duties on 1,336 tariff lines placed in the

sensitive track by Malaysia will be reduced to five percent by Dec 31, 2016.

India, which is Malaysia's 12th largest trading partner, will eliminate duties on 7,767

tariff lines or products in the normal track (1) by Dec 31, 2013 and 1,260 tariff lines in

the normal track (2) by Dec 31, 2016. The import duties on 1,810 tariff lines placed in

the sensitive track by India will be reduced to five percent by Dec 31, 2016.

The sectors that are expected to be the most benefited by the FTA are automotive

components, telecommunications, electrical appliances and aluminium products.

With Malaysia as a significant part of the ASEAN economy, the FTA will open up new

avenues of economic collaboration, both for bilateral trade and for multilateral trade in

the region.

www.miti.gov.my/cms/index.jsp

37

India’s trade with ASEANUSD Billions

Source: www.commerce.nic.in

2007-08 % Share 2008-09 % Share(Apr-Dec)

India's Exports to ASEAN 16.40 10.05 13.80 10.51

India's Imports from ASEAN 22.70 9.01 20.20 8.60

Total Trade 39.10 34.00

Visas • Work permits • Information for Families

• Education • Accommodation and Living

Conditions • Food • Health services • Transport

• News and media • Cultural Activities • Places

of Worship

VISAS

Indian visitors to Malaysia are required to obtain a visa from the

Malaysian High Commission in New Delhi or Consulates General in

Chennai and Mumbai before arriving.

The following are the documents required for Malaysian visa

application:

• Passport (original and

copy);

• Visa Application Form

( I M M . 4 7 - P i n . 1 / 9 7 ) ;

available at visa counter at

Rs. 15 or download it from -

www.imi.gov.my/forms/For

m_IM.47.pdf

• 2 recent passport size photograph (in white background)

• Confirmed return air-ticket;

• Invitation letter / covering letter / supporting document(s) (if any);

and

• Payment of visa fee in demand draft of INR750.00 (Indian

citizen) payable to Malaysian High Commission.

Visa application is processed in two working days.

Validity of the passport shall be more than 6 months.

Vis

ito

r In

form

ati

on

38


Application can be submitted at:

(i) High Commission of Malaysia, New Delhi

Address : Visa Application Counter

High Commission of Malaysia,

50-M, Satya Marg,

Chanakyapuri,

110 021 - New Delhi

Submission Time : 10.00 am – 12.00 pm (Monday – Friday)

Collection Time : 4.00 pm – 4.30 pm (Monday – Friday)

Tel. No. : +91 11 26111291/92/93/97 ext. 221/222

Fax : +91 11 2412 1084

Website : www.kln.gov.my/perwakilan/newdelhi

(ii) Consulate General of Malaysia, Chennai

Address : Consulate General of Malaysia

44, Tank Bund Road

Nungambakam

Chennai - 600 034, India

Telephone : +091-44-28226888/28226889/28226895

Fax : +091-44-28226891

Email : [email protected]

Website : www.kln.gov.my/perwakilan/chennai

(iii) Consulate General of Malaysia, Mumbai

Address : 4-B, 4th Floor

Notan Plaza,

Turner Road, Bandra (W)

Mumbai 400050, India

Telephone : General:+91-22-2645 5751/2645 5752

Visa Section:+91-22-26455541/42

Trade/Investment:+91-22-26591155/56

Fax : +91-22-2645 5750


Website : www.kln.gov.my/perwakilan/mumbai

39

The Malaysian Government issues three types of visa to foreign

nationals:

Issued to foreign nationals who require a visa to enter Malaysia

mainly for a social visit. Normally valid for a single entry and for a

period of three (3) months from the date of issue.

Issued to foreign nationals who require a visa to enter Malaysia

mainly for business or government-to-government matters. Normally

valid for a period within three (3) months to twelve (12) months from

the date of issue.

Citizens of India who wish to enter Malaysia for the purpose of Social

Visit are eligible to apply for Multiple Entry Visa.

The validity of the Multiple Entry Visa is one (1) year. Each entry is 30

days only and extension of stay is not allowed.

Conditions for Multiple Entry Visa are:

• Applicant must show proof of sufficient fund for staying in

Malaysia

• Possess valid and confirmed return ticket

Group tour is not eligible to apply for Multiple Entry Visa.

The Multiple Entry Visa is RM50.00 for Indian Citizens.

Issued to foreign nationals who require a visa to enter Malaysia on

transit to other countries. Foreign nationals on transit without leaving

the airport precincts and who continue their journey to the next

destination with the same flight do not require a transit visa.

Passes are issued for expatriates for key posts, executive posts and

non-executive posts; for skilled workers and professionals; and for

unskilled workers.

Single Entry Visa

Multiple Entry Visa

Transit Visa

WORKING IN MALAYSIA

40


Six agencies are authorised to give employment passes for expatriates depending on

the business activities of the company. Foreign-owned companies with authorised

capital of RM 500,000 are eligible for applying for employment passes.

For other categories of passes, there are certain approved sectors. Applications for

these are to be made with the One Stop Centre, Ministry of Home Affairs.

www.imi.gov.my/eng/im_Page1.asp

Dependent passes are issued to families of expatriates. According to new

regulations, the Spouse of an expatriate holding a Dependent Pass is allowed to take

up paid employment without converting their Dependent Pass to Employment Pass

or Visit Pass Temporary Employment on condition that the permission to take up the

paid employment is endorsed on his/her passport by an authorized Immigration

officer.

Malaysia offers international education at school as well as college level for children

of Indian expatriates. The International School of Kuala Lumpur and Mont Kiara

International School are highly rated schools with American system of education,

offering the American High School Diploma and a full IB diploma, while Garden

International School provides British system. There are several other international

schools of repute in Kuala Lumpur and Penang.

The Indian system of education is offered at the Global Indian International School,

affiliated to CBSE up to Class 12, and at Vikas International School up to Class 10, in

Kuala Lumpur.

www.globalindian.org.sg/Default.aspx?alias=www.globalindian.org.sg/my

www1.iskl.edu.my/index_content.php

www.mkis.edu.my/

www.gardenschool.edu.my/

For higher education, there are government and private universities offering a range

of professional and technical courses. The country actively encourages overseas

students to come to Malaysia. Many reputed foreign higher education providers offer

programs at universities through partnerships or off-shore campuses in Malaysia.

There are about 2000 Indian students in colleges in Malaysia.

For Families

EDUCATION

41

ACCOMMODATION AND LIVING CONDITIONS

FOOD

Hotels in all price ranges are present in Malaysia. Due to the

emphasis on tourism, hotel accommodation is easy to find.

www.asiahotels.com/country/Malaysia.asp

Kuala Lumpur is a cosmopolitan capital with good infrastructure and

modern living conditions. A range of accommodation options is

available all over the city, from condominiums with excellent facilities

to villas with gardens. Architecture and construction are among the

strengths of Malaysian industry and quality is high. Most Indian

expatriates choose to live close to the schools attended by their

children, and several apartment blocks have 30-40 Indian families.

There is no lack of company for families.

Penang, Ipoh, Johor and smaller cities may not have the same

atmosphere as Kuala Lumpur, but provide an amiable environment

for working and living.

Shopping is convenient and major international supermarkets such

as Giant, Carrefour and Tesco are operating in the country. Wet

markets for fresh produce are also found all over.

Due to the presence of significant PIO population, most cities have

stores for Indian spices, dals, rice, and other provisions, although in

smaller cities, North Indian spices may not be readily available. Indian

clothing such as saris, pajama-kurta, etc. as well as stores for jewelry,

utensils, and other supplies may also be found in most places.

Generally, a city will have an ‘Indian street’ full of stores catering to

PIOs.

Due to its multi-racial population, a large variety of cuisines is popular

in Malaysia. While five-star hotels offer high-class dining options, of

particular interest are the food courts that dot the cities. These offer

cheap eats, prepared in hygienic conditions and are strongly

promoted by the Malaysian tourism industry. Restaurants are

inexpensive and eating out is a way of life.

42


Indian food and restaurants are readily available, especially South Indian food. In

Kuala Lumpur, popular South Indian restaurants are Sarvana Bhavan with vegetarian

food, Chutney Mary, etc, while North Indian food restaurants are Spice Garden,

Bombay Palace, Nawab, etc. Nando’s is an Indian fast-food outlet with many

branches in malls all over the city. Additionally, most food courts in malls will have an

Indian food outlet.

Popular Malaysian dishes are Nasi Kandar, white rice or briyani rice served with other

dishes of curry either with chicken, fish, beef, or mutton and Nasi Lemak, rice

steamed with coconut milk and served with anchovies, peanuts, cucumber and a chili

paste known as “sambal”.

Most Indian restaurants will have vegetarian food on the menu. Malay and Chinese

vegetarian meals are hard to find, although Chinese restaurants attached to some

Buddhist temples are vegetarian. In other places, even if food is said to be vegetarian,

there may be some additives that may not come under that category. Indian

vegetarians are advised to be careful about ingredients while ordering at non-Indian

restaurants.

Meat dishes would be halal and pork-free unless specified otherwise.

Malaysian medical services are of

good standard and facilities in

private hospitals are comparable

to anywhere in the world.

Outpatient and emergency

services are available in private

hospitals such as Gleneagles

Intan Medical Center, Pantai

Hospital, Prince Court Medical

Center, etc. Private clinics are

also run by general practitioners

as well as specialists. About one-

third of doctors in the country

have been trained in India.

www.hospitals-malaysia.org/index.cfm?menuid=4#Kuala Lumpur

HEALTH SERVICES

43

Gleneagles Intan Medical Centre 03-42571300 GL /

282-286 Jalan Ampang 50450 Kuala Lumpur 42552888 DL /

www.gimc.com.my/ 42552752/ 2887

Pantai Cheras Medical Centre 03-91322022

1 Jalan 1/96A Taman Cheras Makmur 56100

Kuala Lumpur

www.pantai.com.my/

Prince Court Medical Centre 03-21600000

39, Jalan Kia Peng,

50450 Kuala Lumpur

www.princecourt.com

The best way to get around cities is usually by taxi. Taxis are clearly

marked, usually red in color, and can be flagged off the streets or

called in, for which there is a charge of RM 2. Malls and some tourist

areas have taxi-stands where travellers have to queue up. Although

taxis are metered, drivers will usually insist ahead on a fixed charge,

which can be negotiated.

Rapid KL is the main bus service in Kuala Lumpur and has a good

network. The KTM Komuter is a land-based train, which operates in

major residential areas in and around the city. The Monorail, Putra

LRT and Star are light rail transit systems that use elevated tracks,

moving across and above the city’s busy intersections. The majority

of the train systems connect in KL Sentral, which is the central railway

hub of Malaysia.

Cars may also be rented for longer duration stays. However, driving in

KL is not easy as road signs are unclear and many roads are one-way.

Maps need to be studied in detail or directions should be taken before

setting off. An International Driver’s License is needed for self-driving.

For expatriates, cars may be readily bought in Malaysia and most

international companies have sales operations in the country.

LOCAL TRANSPORT

44


NEWS AND MEDIA

CULTURAL ACTIVITIES

Tamil and English papers are available as well as TV channels in these languages

and including Zee TV in the Astro cable bouquet.

Popular English newspapers are New Straits Times, The Star and International

Herald Tribune. In Tamil, Tamil Nesan, Makkal Osai and Malaysia Nanban are the

most popular.

Astro Malaysia is the local cable TV provider and offers a range of channels in Malay,

English, Cantonese, Mandarin, Tamil and Hindi languages. BBC, CNN and Al

Jazeera are the international news channels on the menu. News from India is difficult

to find, but can be seen on the Internet. Malaysian TV channels include Hindi movies

in their programming as Indian films are very popular in the country.

There are a number of radio channels with music and news. It is interesting to hear

Indian film music on regular Malay programs.

There are cinema houses for Tamil films in most cities. Kuala Lumpur also has

screenings of popular new Hindi films in cinema halls in Capsquare Mall and other

malls.

There is a wide variety of cultural activities in Malaysia, ranging from dance and

theatre to music and art. Indian culture remains strong in the large community of

Malaysian Indians. The Malaysian government is justifiably proud of the country’s

cultural diversity and supports ethnic efforts in training and performing.

The High Commission of India, Kuala Lumpur, organises various cultural

performances in its Netaji Subhas Chandra Bose Auditorium, both by artistes from

India and local performers. It also partners with local organisations to arrange events

featuring top musicians and dancers from India. Free classes are held for tabla and

yoga in the High Commission premises.

The High Commission will be establishing a full-fledged separate cultural centre in

October 2009 that will offer classes in Hindustani vocal music, Kathak, tabla and yoga

as well as a reading room with Indian books and magazines, films, seminars, etc.

www.indianhighcommission.com.my

45

Local organisations are active in meeting the cultural needs of the

Malaysian Indian population. Temple of Fine Arts, Sutra Dance

Theater, Kalpana Dance and others hold classes and performances

in Bharatnatyam, Odissi, Carnatic singing, musical instruments, etc.

www.kakiseni.com/

The British Council has a lending library, but Indian expatriates

prefer to buy fiction books when they travel to India.

Mosques are readily accessible all over the country. Many public

places such as highway rest-stops have prayer rooms, called

‘surau’.

Hindu and Buddhist temples and Christian churches are located in

all cities. Larger cities such as Kuala Lumpur have a number of

temples. In Kuala Lumpur, the popular temples are the Sri

Mahamariamman Temple, Sri Subramanyam Temple at Batu

Caves, Lakshmi Narayan Temple, Rajrajeshwari Temple, etc.

Sikh Gurudwaras can also be found in many cities as there is a Sikh

population of 80,000-100,000 in Malaysia.

For more details on living in Malaysia, visit website of MIDA at

www.mida.gov.my/ under section ‘Costs of Doing Business’.

PLACES OF WORSHIP

46

Institutional Framework

MITI • MIDA • MATRADE • SMIDEC • MSC

Malaysia

MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY (MITI)

MALAYSIAN INDUSTRIAL DEVELOPMENT AUTHORITY

(MIDA)

In conjunction with Malaysia’s overall economic objective of

achieving developed-nation status and to be a top ten global trading

nation by 2020, MITI plans, formulates and implements

international trade and industrial policies. It also promotes

investments and aims to enhance productivity and competitiveness

of Malaysian industry and services sectors.

MITI is proactively encouraging Malaysia’s service sectors to move

the economy towards higher incomes and create high-value jobs.

The services sector is envisaged to diversify into new sources of

growth and exports. FDI is welcomed through exemptions under

domestic regulations and relaxation of equity conditions. MITI aims

to promote services sector development through binding

commitments in regional and bilateral FTAs and WTO.

Among other areas of emphasis of MITI are high technology, capital

intensive and knowledge-driven sectors and resource based

industries.

MITI has a network of ten offices overseas in America, Europe and

Asia, including one in New Delhi.

MIDA is the nodal agency for promoting investments into the

Malaysian manufacturing and services sectors. MIDA also

facilitates Malaysian companies in venturing abroad. It provides a

range of services and information to potential overseas investors,

identifying sectors of opportunity and facilitating joint ventures.

MIDA has an office in Mumbai.

Do

ing

Bu

sin

ess

in

Mala

ysia


47

The MIDA website has in-depth information on policies, incentives

and facilities for investing in manufacturing and services sectors in

Malaysia. See section on Investing in Malaysia in the Handbook for a

summary.

www.mida.gov.my/

MIDA also evaluates the following applications for projects in the

manufacturing and its related services sectors:

• Manufacturing licenses

• Tax incentives

• Expatriate posts

• Duty exemptions on raw materials, components, machinery and

equipment

Guidelines and forms for application can be viewed on the MIDA e-

services portal.

MIDA’s Business Information Center provides detailed publications

and information for interested investors. It is located at:

48

MIDA’MIDA’MIDAs Business Information Center provides detailed publications

and information for interested investors. It is located at:


Ground Floor, Block 4, Plaza Sentral

Jalan Stesen Sentral 5, Kuala Lumpur Sentral

50470 Kuala Lumpur

Tel : 03-2267 3663

Fax: 03-2274 7970

Opening hours: Monday to Friday - 8:30 am to 5:00 pm

Details of MIDA office in Mumbai:

Mr. Vasu Nallayan

Director/Consul Investment

Malaysian Industrial Development Authority

Consulate General of Malaysia (Investment Section)

81 & 87, 8th Floor, 3rd North Avenue, Maker Maxity

Bandra Kurla Complex, Bandra (E)

Mumbai 400051

India

Tel: 00 91 22 2659 1155 / 2659 1156

Fax: 00 91 22 2659 1154

E-mail: [email protected]

Areas of Coverage: India, Pakistan, Sri Lanka

The primary function of MATRADE is to promote exports from Malaysia, supporting

both Malaysian exporters and overseas importers. Given Malaysia’s stress on

advancing its services sector, it assists exports of manufactured goods as well as

services. It also builds the Malaysia brand overseas and facilitates market access

through information and tailored services.

MATRADE has offices in Mumbai and Chennai.

The services of MATRADE include trade missions overseas, participation in trade

fairs abroad, organisation of exhibitions in the country, etc. It runs a number of

exhibition centres in Malaysia.

MATRADE also conducts trade matching services, assisting incoming trade

delegations and providing holistic information to prospective importers. Its online

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

49

enquiry services and regular bulletins disseminate information on

overseas tenders and queries from importers to Malaysian

businesses.

For exporters, MATRADE organises training and capacity-building

programs, offers consultations and advice and runs a help-desk. It is

also the agency for financial assistance for market access, brand-

building, and services exports.

Menara MATRADE,

Jalan Khidmat Usaha,

Off Jalan Duta,

50480 Kuala Lumpur,

MALAYSIA

General Tel : 603 - 6207 7077

Toll Free : 1 800 88 7280

General Fax : 603 - 6203 7037 / 7033

General Email : [email protected]

MATRADE Chennai

Trade Commissioner

Consulate General of Malaysia

Trade Section (MATRADE)

Capitale 2A, 2nd Floor

554 & 555, Anna Salai

Teynampet, Chennai 600 018

India

Telephone : +91-44-2431 3722, +91-44-2431 3723

Fax : +91-44-2431 3725


MATRADE Mumbai

c/o Consulate General of Malaysia

(Investment Section)

81 & 87, 8th Floor,

3rd North Avenue, Maker Maxity,

Contact Details

50


Bandra Kurla Complex, Bandra (E)

Mumbai 400051, India

Telephone : +91-22-2659 1155 , +91-22-2659 1156

Fax : +91 22-2659 1154


Small and Medium Enterprises (SME) in Malaysia are categorised under the sectors

of micro, small and medium firms, and the definition is based on annual turnover and

number of employees. For the manufacturing sector, a firm with annual turnover of

less than RM 25 million and less than 150 full-time employees comes under the SME

category, with distinctions for micro and small firms.

In the services sector, firms with less than RM 5 million

turnover and 50 employees fall under the SME category.

SMIDEC assists Malaysia’s vibrant small and medium

enterprises sector to become globally competitive and

facilitates their integration with global markets. Its

Global Supplier Program helps in training and capacity-

building through skill development centres. Mentoring for accessing global markets is

also part of the program.

The corporation supplies a range of incentives, provides financial assistance and

runs an e-portal for services to SME.

The objective of the MSC is to build the national Information and Communication

Technology infrastructure and transform the country into a knowledge-led society.

MSC Malaysia Status is accorded to domestic and overseas companies that develop

or use multimedia technologies to produce or enhance their products and services,

and for process development.

A comprehensive regulatory framework of intellectual property protection and

cyberlaws has been put in place to facilitate and assist the development of the ICT

and multimedia environment. This is enforced through a 10-point Bill of Guarantee to

the Companies. Five Cybercities have been developed in the first phase. In the next

two phases, the aim is to grow Malaysia into a global ICT hub and to transform it into a

knowledge society.

SMALL AND MEDIUM INDUSTRIES DEVELOPMENT CORPORATION (SMIDEC)

MULTIMEDIA SUPER CORRIDOR MALAYSIA (MSC MALAYSIA)

51

MSC Status Companies, numbering over 2200, enjoy a range of

facilities and incentives including Pioneer Status for 100% exemption

from taxable statutory income for 5 years, 100% Investment Tax

Allowance, duty-free import of equipment, etc.

MSC Status Companies operate within zones with top-quality

infrastructure, including fibre-optic connectivity of 2.5-10 gigabytes

per second capacity, high-capacity links to global centres, and

physical infrastructure.

The companies operating in MSC are sectioned into sub-sectors of

application software; mobility, embedded software and hardware;

internet-based business’ creative multimedia; shared services and

outsourcing; and institutions of higher learning and incubators. Of

these the first category has the highest number of companies. In

2008, 242 companies with an investment of $538 million were

granted MSC status.

Over 60 Indian companies have set up as MSC Status Companies.

www.mscmalaysia.my/home

52

Over 60 Indian companies have set up as MSC Status Companies.

www.mscmalaysia.my/home


TradeMalaysia ranks 29 in the World Bank’s ‘Doing Business

Report’ in the category of ‘Trading Across Borders’. Its

export-import procedures are relatively facilitative and

competitive, while its transport and trade facilitation

infrastructure are of high quality.

As costs of living and doing business in Malaysia are low,

many international companies have set up their regional

headquarters and procurement centres in the country.

Malaysia encourages such regional support

establishments.

Malaysia is being promoted as a services hub for

manufacturing related services and shared services.

Attractive investment incentive packages, including tax

incentives, a liberal foreign equity participation policy and

easy employment of expatriates are offered to

encourage regional operations.

Such operations may be set up in the form of Operational Headquarters (OHQs),

International Procurement Centres (IPCs), Regional Distribution Centres (RDCs),

Regional Offices (ROs), and Representational Offices (RE). The last account for the

majority of regional organisations set up by companies.

Trading, commercial and investment activities in Malaysia can be carried out through

different forms of entities:

• Sole trader or proprietor

• Private limited, public limited or branch company

• Partnership

• Unincorporated association

• Representative and regional office

• Operational headquarters

• International procurement centre

• Regional distribution centre

BUSINESS PRESENCE IN MALAYSIA

53

Private limited companies are the most common form of foreign

businesses operating in Malaysia. Companies are governed by the

Companies Act 1965. Incorporation of a company requires an

application to be submitted to the Registrar of Companies along with

documents and registration fees. Companies have to be registered

with the Companies Commission of Malaysia.

Branches of foreign companies can be registered as a branch office

with the Companies Commission of Malaysia.

Sole proprietorships and partnerships must be registered with the

Registrar of Business under the Registration of Business Ordinance

1965.

Representative office – RO can be set up by foreign

companies for certain activities such as planning, market

research, product development, trading that will not result in

commercial transactions, identifying sources of raw material

and to collect relevant information. ROs must be funded from

outside Malaysia and are not allowed to engage in trading

activities or derive income from their operations.

OHQs – An OHQ is a company incorporated in Malaysia,

whether local or foreign owned, which conducts its business

within the country for the purpose of providing qualifying

services to its offices or its related companies outside

Malaysia. Such services can be management services, fund

management, financial advisory, R&D and training and personnel

management services.

Tax incentives on income, interest and royalties are offered for OHQs.

Additionally, enhanced flexibility for expatriate posts, credit facilities

and investments in foreign securities are also available.

IPCs – IPCs are locally incorporated companies, locally or foreign

owned, which undertake procurement and sales of raw materials,

components and finished products for sale in Malaysia or overseas.

There are threshold requirements for paid-up capital and operating

expenditure as well as turnover.

54


Certain incentives are offered to IPCs on equity, foreign exchange contracts, etc.

RDC – A RDC is a collection and consolidation centre for finished and intermediate

goods from overseas or within the country to be distributed to the dealer within or

outside the country. These are to be located in free trade zones or licensed

warehouses. Floor levels for paid-up capital, operating expenditure and turnover are

established and fiscal and non-fiscal incentives are offered.

www.mida.gov.my

Malaysia has an open and transparent system of trade procedures. While most goods

can be imported freely in the country, licenses are required for certain products such

as arms and explosives, motor vehicles, etc, as listed in the Customs (Prohibition of

Imports) Order 1988.

Malaysia follows the WTO customs valuation system in which the transaction value is

the basis for customs valuation for import duty. Import duties have been reduced or

abolished on almost 5,000 items. Raw materials used for manufacture of goods for

export are exempt from import duties, if they are not available locally of adequate

quality. More than 60% of tariff lines are subject to zero duty.

For details, see www.customs.gov.my

Imported goods are also subject to sales tax and excise duty. Sales tax is generally

5% or 10% except for certain goods such as alcoholic drinks and tobacco products.

The nodal agency for assisting foreign buyers is MATRADE.

Most Malaysian goods are freely exportable, except for those that fall under bilateral

textile agreements or international conventions on environment and conservation.

Some essential products require export licenses.

The Customs (Prohibition of Imports) Order 1988 sets out export licensing

requirements under three schedules – the first of items forbidden for export, the

second for items requiring an export license, and the third of items that can be

exported only under specified conditions.

Export duties are generally not applicable, except for certain products.

EXPORTING TO MALAYSIA

IMPORTING FROM MALAYSIA

55

Manufacturers, traders and service providers registered with

MATRADE are catalogued in the MATRADE e-Directory available on:

www.matrade.gov.my/cms/content.jsp?id=com.tms.cms.section.Se

ction_proDirectory

MATRADE hosts a number of high-profile international exhibitions

each year. International exhibitions across a range of sectors

including furniture, interior design, electronics, food processing,

healthcare, tourism and hospitality, wedding products, printing and

paper, and many others attract large numbers of exhibitors from all

over the world.

The Malaysia Export Exhibition Centre (MEEC) organises trade

shows of Malaysia products at its permanent display area in Kuala

Lumpur. It also enables networking and assists overseas buyers with

information.

Overseas exhibitors are permitted to bring in duty-free trade samples

that are not for sale through customs after appropriate declarations.

The Malaysian International Chamber of Commerce and Industry

issues ATA Carnets for temporary

import of exhibition goods,

advertising material, samples etc.

Malaysia also aims at positioning

itself as an international meetings

and conventions hub for the

region. Reputed convention

centres include Putra World Trade

Centre, Malaysian International

Exhibition and Convention Centre,

Genting Highlands’ Convention

Centre, Mahsuri International

Exhibition Centre at Langkawi,

etc.

See MATRADE Events.

TRADE EXHIBITIONS

56


Investment

INTRODUCTION

SPECIAL ZONES

Industrial Estates

Malaysia has successfully positioned itself as a regional manufacturing hub through

domestic and overseas investments. With exports-to-GDP ratio at close to 110%, the

country is ranked 22nd in global exports and is well-integrated into intra-industry

regional trade, particularly in electronics and electronic equipment manufacturing.

About 5000 companies from all over the world have set up in Malaysia.

Government policy encourages overseas investments and provides a facilitative and

conducive investment climate. Excellent infrastructure, adequate skilled workforce,

low transport and taxation costs, and other advantages make the country a stepping

stone to address the regional and global markets.

A range of incentives for investments are given for manufacturing, agriculture,

tourism, manufacturing related services, and services such as R&D, training,

shipping and transportation, etc. The main incentives are:

• Pioneer Status

• Full income tax exemption

• Investment tax allowance

• Accelerated capital allowance

• Incentive for relocating manufacturing activities

• Industrial building allowance

• Infrastructure allowance

• Reinvestment allowance

• Export incentives

• Import duty exemption on raw materials,

components, machinery and equipment

• Group relief

Malaysia has over 200 industrial estates or parks developed by government

agencies, namely, the State Economic Development Corporations (SEDCs),

Regional Development Authorities (RDAs), port authorities and municipalities. These

provide top-class manufacturing infrastructure such as logistics support,

transportation, connectivity to ports, ICT services, etc.

57

Free Zones

Free Industrial Zones

Eligibility

A Free Zone is an area declared by the Minister of Finance under the

provision of Section 3(1) of the Free Zones Act 1990. It is mainly

designed to promote entrepot trade and specially established for

manufacturing companies that produce or assemble products mainly

for export.

A Free Zone comprise of a free commercial zone for commercial

activities which include trading (except retail trading), breaking bulk,

grading, repacking, relabelling and transit, and a free industrial zone

for manufacturing activities.

The activities and industries therein are subject to minimal customs

formalities and it is deemed as a place outside the Principal Custom

Area except in respect of Prohibition of Imports and Exports under

Section 31 of the Customs Act 1967.

There are 13 FCZs located at North, South and West Port of Port

Klang, Port Klang Free Zone, Pulau Indah MILS Logistic Hub,

Butterworth, Bayan Lepas, KLIA, Rantau Panjang, Pengkalan Kubor,

Stulang Laut, Johor Port and Port Tanjung Pelepas.

Other than minimal customs formalities, FIZs enable these export-

oriented companies to enjoy duty free import of raw materials,

component parts, machinery and equipment required directly in the

manufacturing process, as well as minimal formalities in exporting

their finished products.

There are 16 FIZs located at Pasir Gudang, Tanjung Pelepas, Batu

Berendam I, Batu Berendam II, Tanjung Kling, Telok Panglima

Garang, Pulau Indah (PKFZ), Sungai Way I, Sungai Way II, Ulu

Kelang, Jelapang II, Kinta, Bayan Lepas I, II, III, Bayan Lepas IV,

Seberang Perai, and Sama Jaya.

Companies can be located within FIZs when:

• their entire production or not less than 80% of their products are

meant for export

58


• their raw materials/components are mainly imported. Nevertheless, the

government encourages FIZ companies to use local raw materials/components

To enable companies to enjoy FIZ facilities in areas where it is neither practical nor

desirable to establish FIZs, companies can set up Licensed Manufacturing

Warehouses (LMWs). Facilities accorded to LMWs are similar to factories operating

in the FIZs.

Companies normally approved for LMWs are those:

• whose entire production or not less than 80% are meant for

export

• whose raw materials/components are mainly imported

Malaysia has instituted regional development plans which propose to energize

certain industries in different areas of the country. These regions offer tax incentives

and easier norms in hiring workers, sourcing capital, etc.

The Iskandar Regional Development Authority promotes investments in southern

peninsular Malaysia in the sectors of Creative industries, Educational services,

Financial advisory and consulting services, Healthcare services, Logistics services,

and Tourism related activities.

www.irda.com.my

The Northern Corridor Economic Region covers the northern states of Kedah,

Northern Perak, Perlis and Penang Island. The sectors of emphasis are agriculture,

manufacturing – particularly electrical and electronic products - and tourism.

www.ncer.com.my

The East Coast Economic Region relates to the states of Kelantan, Terengganu,

Pahang and Mersing district in Johor. It focuses on the sectors of tourism, agriculture,

oil, gas and petrochemicals, manufacturing and education. Each of the sectors in the

designated area is offered incentive packages.

www.ecerdc.com

Licensed Manufacturing Warehouses

Eligibility

Development Regions

59

TAXATION

Company Tax

Petroleum Income Tax

Generally, all income of companies and individuals accrued in or

derived from sources outside Malaysia and received in Malaysia is

liable to tax. However, income remitted to Malaysia by resident

companies (other than companies carrying on the business of

banking, insurance, air and sea transportation), non-resident

companies and non-resident individuals are exempted from tax.

From the year 2000, income tax in Malaysia is assessed on income

earned in the current year.

The assessment system will be changed to a self-assessment

system in stages starting 2001.

Effective from the year of assessment 2004, income remitted to

Malaysia by a resident individual is exempted from tax.

Resident and non-resident companies 25%

Resident companies with paid-up capital of

RM2.5 million (US$754,375) and less at the

beginning of the basis period for a year of

assessment

- on the first RM500,000 (US$150,875)

chargeable income 20%

- on subsequent chargeable income 25%

This is applicable to a person, partnership or company who has

signed Petroleum Agreement with Petronas or Malaysia-Thailand

Authority and carries out petroleum operation.

"Petroleum operations" means searching for, winning or obtaining of

petroleum in Malaysia (by drilling, mining, extracting etc), all

operations incidental thereto and sale or disposal of petroleum so

won or obtained, transportation within Malaysia of petroleum so won

or obtained to any point of sale or export but excludes transportation

outside Malaysia; refining or liquefing; dealing with products so

60


refined or liquefied; service involving the supply and used of

rigs, derricks, ocean tankers and barges - 38%

Resident individuals with chargeable income of RM16,667

(US$5,029) and above per annum (after deduction of personal

reliefs) 1% - 27%

Non-resident individuals (not entitled to any personal

reliefs) 27%

Non-resident persons

Special classes of income (use of moveable property, technical services, installation

services on the supply of plant and machinery, etc.) 10%

Interest 15%

Royalty 10%

Contract payment on:

- account of contractor 10%

- account of employee 3%

Other income such as commission, guarantee fees, agency fees, brockerage fees,

introducers fees, etc. 10%

Source: Inland Revenue Board - www.hasil.org.my

Service tax is imposed on taxable services provided by taxable persons. Services

include services provided by professionals (such as lawyers, engineers, architects,

surveyors, consultants), advertising firms, private hospitals, insurance companies,

communication companies, hotels and restaurants. 5%

Capital allowances are given on qualifying capital expenditure. Initial allowances are

given only once while annual allowances are given every year by the straightline

method. Some of the items accorded allowances are shown below. For plant and

Personal Income Tax

Withholding Tax

Service Tax

Capital Allowances

61

machinery, companies are advised to verify with the Inland Revenue

Board on the specific items which qualify.

Initial Allowances

Industrial buildings 10%

Computer and IT equipment 20%

Environmental control equipment 40%

Heavy machinery & motor vehicles 20%

Plant and machinery 20%

Others 20%

Annual Allowances

Industrial buildings 3%

Computer and IT equipment 40%

Environmental control equipment 20%

Plant and machinery

- Motor vehicles, heavy machinery 20%

- Plant and machinery 14%

- Others 10%

Sources:Inland Revenue Board - www.hasil.org.my/

Double Taxation Avoidance Agreements have been signed with over

60 countries, including India.

The New Economic Policy was instituted in 1971 to underscore the

importance of achieving socio-economic goals alongside pursuing

economic growth objectives as a way of creating harmony and unity

in a nation with many ethnic and religious groups. It also gave

preference to Bumiputeras in jobs, government contracts, housing,

education and business.

To enhance Malaysia's investment climate, equity holdings in all

manufacturing projects were fully liberalised effective from 17 June

NEW ECONOMIC POLICY

62


2003. Foreign investors can now hold 100% of the equity in all investments in new

projects, as well as investments in expansion/diversification projects by existing

companies, irrespective of the level of exports and without any product/activity being

excluded.

The Kuala Lumpur Regional Centre for Arbitration was established in 1978 under the

auspices of the Asian-African Legal Consultative Committee (AALCC) - an inter-

governmental organisation cooperating with and assisted by the Malaysian

government.

A non-profit organisation, the Centre serves the Asia Pacific region. It aims to provide

a system to settle disputes for the benefit of parties engaged in trade, commerce and

investments with and within the region.

Any dispute, controversy or claim arising out of or relating to a contract, or the breach,

termination or invalidity shall be decided by arbitration in accordance with the Rules

for Arbitration of the Kuala Lumpur Regional Centre for Arbitration.

KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION

63

MANUFACTURING

India and Malaysia need to be innovative in identifying key areas in

the manufacturing sector for collaboration. Opportunities exist in

technology-intensive industries where India enjoys cost advantages

and skilled engineering and research personnel. The two countries

can cooperate in emerging sectors such as pharmaceuticals,

machinery and equipment, automotive components, renewable

energy, aerospace, designer household goods, etc. Industries such

as chemicals also offer opportunities, while cooperation in products

such as metal goods and food can also be enhanced.

The major tax incentives for

companies investing in the

manufacturing sector are the

Pioneer Status and the

Investment Tax Allowance.

Eligibility for Pioneer Status

and Investment Tax Allowance

is based on certain priorities,

including the level of value-

added, technology used and

industrial linkages. Eligible

activities and products are termed as "promoted activities" or

"promoted products". Incentives are also offered for high technology

companies, location in certain regions, strategic projects, small and

medium companies, and for certain sectors.

www.mida.gov.my/en_v2/index.php?page=manufacturing-sector-2

An outline of some sectors is mentioned below.

Malaysia provides a low-cost center for addressing the 500 million

strong ASEAN vehicles and parts market. Government projects to set

up car manufacturers Proton and Perodua have imparted design and

engineering skills and helped build an infrastructure of ancillary

industries. The vehicle industry has 28 manufacturing and assembly

plants with a capacity of 963,300 passenger and commercial vehicles

AUTOMOTIVES

Sect

ora

l O

pp

ort

un

itie

s

64


and 1 million motorcycles per year, catering to the domestic market. Annual sales are

over 500,000 vehicles.

In the auto parts industry, there are close to 700 manufacturers producing a range of

components such as body panels, brake parts, engine parts, transmission and

steering parts, and electrical and electronic parts. Quality and competitive prices

have made Malaysia a preferred location for OEM production and companies such as

Mercedes Benz, Mazda, Honda, Nissan, etc number among those with operations in

the country.

In 2008, exports of components were RM2 billion. Imports have grown rapidly from

RM 2.2 billion in 2004 to RM 4.6 billion in 2008.

The National Automotive Policy aims for integration of the sector with regional and

global intra-industry trade. Focusing on niche areas, it will promote Malaysia as a

regional automotive hub with higher exports of vehicles and parts. Collaboration with

overseas enterprises for strategic tie-ups is to be promoted. The country is focusing

now on R&D and design engineering. Group Lotus Inc, a subsidiary of Proton, is

emerging as a leading automotive engineering consultancy with clients including

major car companies, OEMs and Tier 1 suppliers.

Investments are encouraged in areas such as critical components, auto electronic

components, fuel efficient engines and alternative fuel engines, modular

manufacture/systems integration and R&D.

Import duties from non-ASEAN countries range from 0-10% for CKD vehicles and

motorcycles and 30% for CBU vehicles and motorcycles. Excise duties are between

60-125% for vehicles and 20-50% for motorcycles.

Tax incentives for automobile and component manufacturers include pioneer status,

investment tax allowance, and incentives for R&D, training, and exports.

For Indian companies, especially those in the southern states, Malaysia’s aspiration

to be a regional hub matches well with Indian competencies. The ASEAN market for

vehicles and parts is expected to grow on the basis of higher incomes in countries

such as Indonesia and Philippines. In 2008, sales of motor vehicles stood at 615,270

in Thailand, 603,774 in Indonesia, 124,449 in Philippines and 548,115 in Malaysia.

Indian companies could explore Malaysia as a manufacturing hub to converge design

and new product development in India with manufacturing competencies in Malaysia.

65

Contacts

Proton – www.proton.com.my

Perodua Sales Sdn Bhd – www.perodua.com.my

Modenas – www.modenas.com.my

Malaysian Automotive Component Parts Manufacturers Association

Malaysian Automotive Association – ww.maa.org.my

Malaysia’s strong electronics sector caters to a diverse range of

components, consumer electronics and industrial electronics. The

sector is the largest contributor to manufacturing output and

employment with close to 1000 companies and almost 300,000

workers. Exports from the sector contribute over 40% to aggregate

exports and meet standards in leading markets such as USA,

Singapore, Japan, the Netherlands and Hong Kong. The biggest

export item is semiconductor devices, of which Malaysia is a leading

global exporter.

In the electrical products category, the industry produces a range of

sophisticated electrical appliances including air-conditioners,

refrigerators, washing machines, vacuum cleaners and other

household gadgets for major brands such as Sony, Philips and

Samsung. Wires and cables, switchgears, distribution transformers,

electric motors, dry cells, automotive batteries, etc are also

manufactured.

Electronics product manufacturing is also diverse, catering to

electronic components, consumer electronics, and industrial

electronics sub-sectors. Semiconductor devices such as integrated

circuits, memories and microprocessors, opto-electronics, hybrids,

and high-reliability military products are among the manufactured

goods. A large range of components such as capacitors, relays,

switches, transformers, and others are also in the manufacturing

profile. Among consumer and industrial electronics, the products

include color TV receivers, audio products, video CD players, digital

transmission equipment, personal computers and accessories,

public telephone exchanges, etc.

ELECTRONICS

66


The industry is now moving up the value chain by using indigenous design and R&D

capabilities. The aim is to build electronics and ICT clusters around the

semiconductor sector with core activities in wafer fabrication, and high-end digital and

ICT products. The Multimedia Super Corridor provides ideal facilities for computer

hardware and software, R&D and support services.

Indian companies may source electronic products from Malaysia as they are

competitive and of international standards. Among items of possible exports are

switches, fuses, diodes and TV parts which are significant import items.

Contacts

Malaysian Electrical and Electronics Industry Group (Federation of Malaysian

Manufacturers) – [email protected]

Association of the Computer and Multimedia Industry Malaysia (PIKOM) -

www.picom.org.my

The Electrical and Electronic Association of Malaysia – www.teeam.com

Malaysian Electric Cable and Wires Association – www.mcma.org.my

The Malaysian American Electronics Industry Association (MAEIA)

The Malaysian National Computer Confederation - www.mncc.com.my

The plastics industry of Malaysia is a vibrant and progressive sector of the industrial

scenario, comprising about 1300 manufacturers with a wide range of products for

various uses. The sector produces auto components,

electrical and electronic parts, telecommunications

components, construction material, household goods,

bottles, packaging materials, etc. Both primary and non-

primary forms are part of the sector. About half the total

industry output is exported with key markets including

Singapore, Hong Kong, Japan, China, Thailand and UK.

The major part of Malaysia’s plastics exports are in primary

forms, which include polyethylene (PE), polypropylene (PP),

polyacrylonitrite-co-butadine-co-styrene (ABS), polysterene

PLASTICS

67

(PS), polyvinyl chloreid (PVC), and polyethylene terephthalata

(PET). The industry uses 1.4 million tonnes of plastic resins, about

half of which are imported and rest produced locally.

Plastics in non-primary forms are major exports, including plates,

sheets, films, coils, strips and pipes. It is a significant supplier of

plastic bags, and other packaging material for Europe, Japan and

Australia.

Malaysian companies also conduct contract manufacturing and

supply of plastic parts and components for reputed multinational

companies in Malaysia. Standards of ISO 9002 and ISO14001 are

widespread, while pipe and wire and cable compounds meet

stringent national and international pipe standards.

The Malaysian plastics industry is now configuring to meet the

advanced and emerging demands arising from greater use of plastic

products in automotives, aerospace, and defense products. The

stress is on value-added products that derive from high skills and

technology infusion for world markets.

The Indian plastics industry is highly fragmented with most players in

the small and medium enterprises sector. Exports have grown by 5%

CAGR in 2001-02 to 2005-06 with a domestic consumption of 160 mt.

Exports of performance plastics have grown by five times in the

period. In 2007-08, total exports of plastics and products stood at

$3.6 billion with a growth of 21% over the previous year. Over half of

products in plastics cater to the packaging industry, with agriculture

and infrastructure being other consumers.

The plastics products sector in India offers good opportunities for

cooperation with Malaysia. Malaysian companies could invest in the

sector. Indian companies could tie up for addressing emerging

demands and matching Indian engineering and design skills with

Malaysian manufacturing competencies.

Contacts

Malaysian Plastics Manufacturers Association – www.mpma.org.my

68


CHEMICALS

With its rich resource base in petroleum and palm oil, Malaysia produces a diverse

range of chemicals and chemical products, including oleochemicals. The country is a

leading producer of high quality soap noodles. These use palm oil or palm-based fatty

acids and glycerine. Global manufacturers of shampoos, conditioners, soaps,

cosmetics, and baby products source their raw material from Malaysia. Petroleum

products, including petrochemicals, are a major export sector as well. Paint and paint

products as well as fertilisers and pesticides are also produced.

The key sectors of the Malaysian chemicals industry are: agricultural chemicals,

cosmetics and toiletries, industrial gases, inorganic chemicals, oleochemicals,

paints, and petrochemicals. A wide range of petrochemicals are produced in

Malaysia, such as olefins, polyolefins, aromatics, ethylene

oxides, glycols, oxo-alcohols, exthoxylates, acrylic acids,

pthalic anhydride, acetic acid, styrene monomer,

polystyrene ethylbenzene, vinyl chloride monomer and

polyvinyl chloride.

The Indian chemicals industry, which accounts for 16 per

cent of the country's manufacturing output and 3 per cent of

GDP, is the world's 12th largest and Asia's 3rd largest in

terms of volume. It accounts for 13-14% of total exports and 8-9%and is estimated to

grow to US$ 80-100 billion by 2010. Indian exports to Malaysia of chemicals have

expanded four-fold in 2002 to 2008 and contribute a significant share to total exports.

As Malaysian companies are working towards meeting new standards set by export

markets such as EU and Japan, investments in new product development and R&D

are being expanded. Indian companies can forge partnerships with Malaysian

companies in this field. Inorganic chemicals such as caustic soda and soda ash as

well as organic chemicals such as acyclic alcohols and cyclic hydrocarbons can be

explored in the mutual trade basket.

Contacts

Chemical Industries Council of Malaysia – www.cicm.org.my

Malaysian Paint Manufacturers Association

Malaysian Oleochemical Manufacturers Group

Malaysian Petrochemicals Association – www.mpa.org.my

69

BIOTECHNOLOGY AND PHARMACEUTICALS

Malaysia is actively promoting the biotechnology sector. The

Malaysian Biotechnology Corporation was set up to support the

sector to meet the aim of having 400 local companies and 8 foreign

companies. An outlay of $548 million over the 9th plan has been

allotted for development of biotechnology in areas such as R&D,

technology and infrastructure.

BioNexus is being set up as a hub for biotech industry and is expected

to produce revenue of over $1 trillion by 2015. Three centers of

excellence for genomics and molecular biology, pharmaceuticals and

nutraceuticals and agro-biotechnology are being set up.

Agri-biotechnology will raise productivity in key agricultural crops of

Malaysia such as palm oil, rice, and lumber. Biopharmaceuticals are

being researched for various diseases to address the $200 billion

global market. Vaccines and bioinformatics are also on the priority list

for promotional efforts. The industry as a whole is expected to expand

to $70 billion by 2020.

The country is actively courting companies with

high credentials in the sectors. By April 2009, 101

companies with an investment of $388 million

had been registered in BioNexus.

The biotechnology industry in India grew by 20

per cent during 2007-08 to a size of US$ 2.56

bi l l ion. The top contr ibut ion is f rom

biopharmaceuticals at $1.6 billion. Research services touched US$

500 million and bio-IT (bioinformatics) was US$ 250 million. With the

new biotech policy of the central government, the sector is poised to

generate US$ 13 billion-US$ 16 billion by 2015.

In the pharmaceutical sector, Malaysia produces most of its

requirements with imports standing at close to $700 million in 2006

and consisting mainly of medicament mixtures. Drug manufacture in

the country includes analgesics, antacids, diuretics, antibiotics and

antihistamines. Traditional medicines are also popular in the form of

dried or fermented herbs.

70


The Indian pharmaceutical industry

is one of the world's largest and

most developed, ranking 4th in

volume terms and 13th in value

terms. The country accounted for 8

per cent of global production and 2

per cent of world markets in

pharmaceuticals in 2008.

The Ind ian pharmaceut ica l

offshoring industry is slated to

become a US$ 2.5 billion opportunity by 2012, thanks to lower R&D costs and a high-

talent pool in India. India exported drugs worth US$ 4.15 billion in 2007-08.

The two countries have good scope for collaboration in biopharmaceuticals and

vaccine development for the global market, leveraging the excellent infrastructure in

Malaysia and the Indian knowledge base.

Funding for various activities as well as incentives such as tax exemption is available

for companies established under the BioNexus scheme.

www.mida.gov.my/en_v2/index.php?page=biotechnology-industry

Contacts

Malaysian Biotech Corporation - www.biotechcorp.com.my

Malaysian Biotechnology Information Centre – www.bic.org.my

71

SERVICES

Malaysia’s services sector contributed over half of its GDP in 2008.

The country has initiated a concrete strategy to raise this level to 70%

by 2020 through liberalisation of the sector. This is expected to attract

FDI and boost competitiveness of the sector.

Investments flowing into the sector are going into financial services,

energy, telecommunications, housing, ICT and other support

services. Sub-sectors of high growth included utilities, wholesale and

retail trade, accommodation and restaurants.

Government policy aims to target certain sectors to begin with,

including healthcare, ICT, transport, business services and tourism.

In new measures announced during 2009, 27 sub-sectors were

liberalised. The government has also launched a RM 100 million

capacity development fund to raise the efficacy of liberalised policies.

Malaysia’s exports of services in 2007 stood at $28.2 billion while its

imports had reached $27.8 billion, making it the 30th largest exporter

and importer of services in the world, an impressive achievement

given its development level. Exports expanded by 30% in 2007.

www.mida.gov.my/en_v2/index.php?page=liberalisation-of-the-

services-sector

Malaysia is aiming to become a

regional hub for higher education

wi th a ta rget o f 100,000

international students by 2010.

Already, about 62,000 students

from overseas are studying in the

country. Low costs and high

standards are expected to attract

more students, and Malaysia is

encouraging overseas education

providers to set up campuses in

the country.

HIGHER EDUCATION

72


An EduCity is being set up in Nusajaya, part of Iskandar Malaysia, to house overseas

institutions. The development region of Iskandar is planned as a centre for high-tech

businesses in emerging knowledge sectors, which will require high level of human

proficiencies. EduCity will be fully ready by 2018 with a capacity of 12,000 students.

Similarly, Kuala Lumpur Education City is proposed near the capital city’s airport.

At the same time, Malaysians are also travelling overseas for higher education. India

was a preferred destination for Malaysian students soon after its independence, and it

is estimated that about 30,000 Malaysians were enrolled at Indian higher education

institutions at the peak. Since then, the number has come down considerably.

However, India enjoys high brand image among Malaysians as an educational hub.

With its low-cost advantage, India has the potential to attract many more students,

especially given the high number of Indian-origin population.

Several Indian educational institutions are operating in Malaysia. Melaka Manipal

Medical College has been set up as a twinning arrangement with the Manipal

Academy of Higher Education as the Indian partner. Vinayaka Mission’s Research

Foundation, a Deemed University in Salem in Tamil Nadu, has established twinning

arrangements with Penang International Dental College (PIDC) in 2005. The

Vinakaya Missions has recently announced greater investments in establishing

educational institutions in Johor Bharu.

Two schools affiliated to the CBSE of India are also running with good success in

Malaysia. The scope for more schools is increasing with the rising number of Indian

expatriates working in the country, and their spread into cities such as Penang and

Johor Bharu.

Malaysians are keen to travel to India for higher education in professional and degree

courses. Indian companies may consider education seminars to alleviate the

information deficit and attract more students.

Indian institutions could institute twinning arrangements for undergraduate courses,

with part of the study program in India and part in Malaysia. Distance learning

programs and specialised courses could also be offered online. Partnerships with

local universities are possible for certain programs and curricula. Skill development

for sectors such as tourism and hospitality, healthcare, and IT can be carried out as

well.

73

Several incentives are offered to encourage training, skill

development and higher education in Malaysia. Technical or

vocational training institutions are eligible for an Investment Tax

Allowance of 100% for ten years. This facility is available also to

Private Higher Education Institutions (PHEIs) in the field of science

for specified sectors. Certain deductions are also offered for

recruitment of overseas workers, training facilities, etc.

www.mida.gov.my/en_v2/index.php?page=training

Contacts

Department of Private Education, Ministry of Education –

www.moe.gov.my

Malaysian Association of Private Colleges - www.mapcu.com.my

National Association of Private Educational Institutions

Malaysia is a popular tourist destination for its unique rainforests,

beautiful beaches, excellent diving sites, high-class resorts, golf

courses, and culture. Diverse cultures imbibing Muslim, Chinese and

Indian characteristics attract tourists from each of these large travel

populations. Its competitive costs and proximity to key markets in

South East Asia, China, India and West Asia as well as English

language make tourists feel comfortable. It also offers a range of

cuisines to suit different palates, including halal food for Muslims.

The Tourism Ministry has actively promoted the ‘Malaysia, Truly Asia’

brand and runs an ongoing Visit Malaysia program. It also aims to

promote the country as a meetings, incentives, conferences and

exhibitions (MICE) destination for international businesses. In 2008,

there were 22 million arrivals, spending $14.8 billion from a mere $2

billion in 1999. Tourism is now the second-highest foreign-exchange

earner after manufacturing.

The aim is to have 24.6 million visitors in 2010. However, this would

be challenging as the global economic crisis led to downturn in tourist

arrivals.

TOURISM

74


Indian visitors to Malaysia numbered 550,738 in 2008, up over 30% from the previous

year and the fifth largest source for the country. Tour operators have succeeded in

positioning Malaysia as one of lowest cost overseas destinations for Indian travellers,

which now number some 8-10 million. Consequently, it is becoming increasingly

popular for newly-affluent Indians. A recent visit to India by Malaysian Tourism

Minister set a target of a million Indian tourists annually in the next few years.

Addressing the needs of Indian tourists offers great opportunities for Indian hospitality

providers, restaurants, entertainment and media, etc. The sector of restaurants is the

largest employer of Indian workers. Malaysian tour operators offer three and four day

packages which include a limited circuit of Kuala Lumpur, Genting Highlands, and

Langkawi. The circuit could be expanded and tour options covering islands, Sabah

and Sarawak could be developed. These would require tourist infrastructure and

ancillary facilities in these areas, subject to local regulations for their conservation.

Similarly, India could target Malaysians for tourism to India. India’s exotic sights and

variety of handicrafts and textiles are very appealing to Malaysians. Shopping tours

offered as a package to handicraft and handloom centers would be well-received.

Religious tourism for Malaysia’s Muslim, Buddhist and Hindu populations could be

developed. A special section could be the Indian-origin population in Malaysia under

the Know India program or Trace Your Roots program of India’s Ministry of Overseas

Indian Affairs.

Incentives offered for tourist facilities include Pioneer Status or alternatively

Investment Tax Allowance, and deductions for overseas promotion, trade fairs, and

tour operators.

www.mida.gov.my/en_v2/index.php?page=tourism-industry

Malaysia’s IT sector is being promoted as a strategic industry for the future. The

Multimedia Super Corridor is a vehicle for this. Since 2006, six new MSC

cybercenters have been established. MSC status companies have gone up from

1421 in 2005 to 2236 in 2008, employing over 50,000 people. With projected rapid

growth of the Asia Pacific ICT sector to an expected $120 billion by 2011, Malaysia is

projecting itself as a regional hub for the industry.

The country ranked 3rd in the ATKearney Global Services Location Index behind

China and India. Due to its excellent infrastructure, attractive ecosystem and

ICT

75

multilingual workforce, Malaysia can be a destination for IT services

and support, contact centers and back-office support. The presence

of 130 shared services and outsourcing (SSO) centres in MSC

Malaysia, including global giants such as IBM, Intel, etc. and of about

250 call centers attest to the growing reputation that the country is

building for itself. MSC Malaysia focuses on smart card technology,

smart schools, telehealth, e-government, e-business, creative

multimedia and SSO.

Financial incentives offered to MSC companies include Accelerated

Capital Allowance (ACA) that provides an initial allowance of 20%

and an annual allowance of 40% for expenditure incurred in acquiring

computers and information technology assets, including software;

duty exemption on import of multimedia equipment, foreign

ownership rights, etc.

A large number of Indian IT companies have flocked to MSC for the

tax incentives and excellent infrastructure as well as the low cost

operating environment. Satyam Computers had designated its facility

in Malaysia as its largest outside India before being taken over to

become Mahindra Satyam.

The MSC infrastructure would be especially advantageous for

smaller Indian software companies that want to expand within the

region.

Contacts

www.mida.gov.my/en_v2/index.php?page=information-and-

communication-technology

www.mscmalaysia.my

76


High Commission of India

The High Commission of India

No. 2 Jalan Taman Duta

Off Jalan Duta

50480 Kuala Lumpur

Contact Numbers

Tel : (00-603) 2093 3510 (Five lines)

Fax: (00-603) 2093 3507, 2092 5826

www.indianhighcommission.com.my/index.php

The High Commission of India, Kuala Lumpur, provides comprehensive information

to Indian businesspersons wishing to interact with Malaysian enterprises. This is

carried out through its website, a monthly newsletter for economic and business

news, exhibitions and other trade events, and trade-matching.

The High Commission provides office space to visiting Indian businesspersons at its

India Business Centre.

The High Commission responds to online trade queries, and supplies information on

entry strategies to Indian investors. Contact e-mail addresses are

[email protected] and [email protected]

Tenders and notices are published in the monthly newsletter.

The High Commission website provides links to important local websites such as MITI

and MIDA and local chambers of commerce and industry.

The High Commission of India brings out two newsletters namely ‘India Beckons’, a

business newsletter and ‘India Update’ a newsletter covering various facets of India

and also the important developments in India. Both these newsletters may be

accessed at the website and is circulated through e-mail as well. The website also has

archives of these newsletters for ready reference. A request for e-mail despatch of

these newsletters may be made to [email protected]

Trade and Investment Queries

NEWSLETTERS

77

Exhibitions

INDIA BUSINESS CENTRE

The High Commission of India in Malaysia also organizes a number

of trade events in partnership with Indian chambers of commerce and

industry and trade promotion councils. Recent events have covered

the sectors of pharma, chemicals, tourism, education, etc.

Trade associations and councils are encouraged to contact the High

Commission for assistance in organising business missions and

delegations to Malaysia.

The High Commission of India has set up “India Business Centre” in

its Chancery premises located at No. 2 Jalan Taman Duta, Off Jalan

Duta, 50480 Kuala Lumpur. The facilities at the India Business Centre

can be availed by payment of nominal charges.

The facilities available at the India Business Centre include:

• Meeting Room with a

seating capacity for 8

persons, with audio-visual

facility;

• Computer with e-mail and

internet facilities, fax

machine and a telephone

with IDD facility;

• Photocopying;

• Facilities for providing responses to business queries regarding

potential importers, exporters and investors; Indian and

Malaysian business directories;

• Malaysian and Indian trade statistics, including detailed

information on specific products of export & import interest;

• Staff of the Commercial Wing of the High Commission will be

available to assist the visiting businessmen in arranging

services, including secretarial assistance.

78


Business Tips• Visitors are advised to carry their passports, in original form, with them at all

times.

• Greet Malaysians with a firm handshake accompanied by a bow. Malaysians touch their right hand to their chest after shaking hands to denote respect.

• Many Malaysians enjoy honorific titles to their names, such as Dato’, Datuk, or Tan Sri. In address, visitors are advised to prefix the name with the title in place of using ‘Mr.’ For example, Dato’ Ahmad, Tan Sri Lim, etc. In one-to-one meetings, the title alone will suffice while addressing the holder; for example, Dato’, Tan Sri, etc.

• Wives of Dato’ and Datuk are referred to as Datin. Wives of Tan Sri are referred to as Puan Sri.

• It is wise to note the titles of royalty and very senior officials before meeting them and to confirm the correct way of addressing them in advance of the meeting.

• While ‘Mr’ and ‘Mrs’ are normally used in addressing non-titled persons, Malay men can be addressed as ‘Encik’ (pronounced as ‘Inchik’). Malay women can be addressed as Cik (pronounced as ‘Chik’) if they are not married and ‘Puan’ if they are married.

• It may be difficult to get meetings during festivals, including Ramadan for Muslims, Chinese New Year for Chinese and Thaipusam and Deepawali for Indians.

• During the fasting month of Ramadan, it is improper to offer Muslims food and drink during the day.

• Business visitors should come equipped with a plentiful supply of business cards. Cards are proffered with both hands and accompanied by a bow. Cards should be received with a bow.

• Most Malaysian meetings and events include food. Guests are advised to partake of the refreshments so as not to offend hosts. It is in order to avoid certain items on the grounds of religion or custom.

• While selecting menus for Malaysian business guests, care must be taken to have halal food for Muslims. Chinese businesspersons usually do not have dietary restrictions, while Indian-Malaysians will not take beef and some may be vegetarian.

• Avoid pointing with the index finger.

• Shoes may need to be removed while entering Malaysian houses.

• Visitors may need to be careful with their personal belongings when outdoors, especially ladies with handbags.

79

See MATRADE events for details

www.matrade.gov.my/cms/content.jsp?id=com.tms.cms.section.Se

ction_296a683e-7f000010-7b947b94-e1734c07

Malaysia Technology Expo

Venue: Putra World Trade Centre

Kuala Lumpur

Global Innovation & Invention


Kuala Lumpur

Malaysian International Furniture Fair

International Furniture Trade Exhibition

Venue: PWTC, MECC

Malaysia Furniture Furnishing Materials Exhibition

Venue: Kuala Lumpur Convention Centre

Kuala Lumpur

Export Furniture Exhibition Malaysia

International Furniture Fair

Venue: Malaysia Agro Exposition Park, Serdang

Bursa's Annual Palm & Lauric Oils Conference & Exhibition: Price

Outlook 2009/2010 (Poc 2009)

Annual Gathering Of The Oils And Fats Fraternity


Kuala Lumpur

Intrenasionale Industrial Expo

International Industrial Machinery & Equipments Exhibition

Venue: Penang International Sports Arena (Pisa)

Malaysia Wedding Festival


Asia Pacific Natural Products Expo


80

Majo

r E

xh

ibit

ion

s


Malaysia International Gold & Jewellery Fair


Automechanika Malaysia

Malaysia International Trade Fair For Automotive Parts, Equipment and Service

Suppliers


Se-Asian Healthcare Show

Medical - Healthcare - Pharma & Medical Beauty


Herbal Asia

Asia's Premier Herbal Trade Show

Venue: MECC, Jln.Duta Kuala Lumpur

Metaltech Malaysia

Asean International Metalworking, Machine Tool, Cad/Cam, Metrology, Mould & Die,

Surface & Heat Treatment, Foundry, IA, Robotics, Precision Engrg & Welding

Technology Exhibition


MTA-Malaysia


Mihas - The Malaysia International Halal Showcase

Halal Products And Services

Venue: MECC, Menara Matrade

ITEX

Invention and Design


International Beauty Expo


Interiors Malaysia

Malaysia International Interiors Lifestyle Trade Fair

Venue: PWTC Kuala Lumpur

81

Global Indian Shopping Festival

International Consumer & Trade Show on Indian Based Products

Venue: Mid Valley Exhibition Centre

World Chambers Congress

The Only Global Event For Chambers of Commerce Executives and

Chambers Leaders


SMIDEX

Venue: KLCC

Oil & Gas Asia

The Asia Oil, Gas & Petrochemical Engineering Exhibition


Nepcon Malaysia - Penang

Venue: Penang International Sports Arena

Malaysia International Road Safety Exhibition

Road Safety & Infrastructure

Venue: Malaysia Intl. Exh. & Convention Centre

Seri Kembangan

Archidex

Malaysia Architecture, Interior Design & Building Exhibition


Malaysia Int'l Jewellery Fair


MIFB

The Malaysia International Food & Beverage Trade Fair

Venue: PWTC

Cosmobeaute Asia


82


Industrial Automation

International Exhibition On Industrial Automation, Manufacturing Process, Control &

Management Equipment & Technology


Asean Elenex

International Exhibition of Transmission & Distribution & Electrical Engineering for the

Asean Region


APHM/ASQUA/ISQUA International Healthcare Conference & Exhibition

International Healthcare Conference & Exhibition


Malaysia International Rubber, Plastic, Mould & Die Industry Technology Exhibition


Malaysia International Food Processing & Packaging


Malaysia International Sign & Digital Printing


Franchise International Malaysia

Venue: PWTC

IPMEX Malaysia

International Printing, Paper, Packaging Machinery Exhibition

Venue: Putra World Trade Centre, Kuala Lumpur

Laboratory Asia

Asian Conference on Analytical Sciences


Food & Hotel Malaysia

International Exhibition of Food, Drinks, Hotel, Restaurant & Foodservice Equipment,

Supplies, Services & Related Technology


83

Malaysia International Sports Exhibition & Trade

Venue: Putra Stadium, Bukit Jalil

Kuala Lumpur

World Military Medicine Expo


Kuala Lumpur

Worldagri Trade

Kuala Lumpur

Malaysia Jewelry Festival


Malaysia Wedding Festival


Beauty Expo

Beauty & Therapeutic Professionals


Metal Technology Show

Venue: Putra World Trade Centre,

Livestock Asia Expo & Forum


M-Plas

International Plastics and Rubber Trade Fair for Malaysia

Venue: KLCC

Intrade Malaysia

Venue: Matrade Exhibition & Convention Centre

Borneo International Trade Fair

Venue: Kota Kinabalu Sport Complex

Biomalaysia

Bio Technology

Venue: Kuala Lumpur Convention Centre, Kuala Lumpur

84


85

Indian Business and Community

Associations

Consortium of Indian Industries in Malaysia (CIIM)

Tel: +603 89256622

Fax: +603 89259957


Website: www.ciim.org.my

Malaysian Associated Indian Chamber Of Commerce and Industry

Megan Avenue 11, Block B, 9th floor, Unit 1,

No 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur

Tel: 03 2171 2616

Fax: 03 2171 1195

E-mail : [email protected]

Website: www.maicci.org.my

Malaysia India Business Council (MIBC)

Tel: 7985 8288

Fax: 7952 9388


Malaysian Indian Business Association (MIBA)

Tel/Fax: 03-8061 3133

H/P: 016-716 3636


Malaysia-India Chamber of Commerce (MAICOM)

Tel: 03 2278 5555

Fax:03 2278 5544

Email: [email protected]

Community Associations/Organisations

Bharat Club

Tel: 03 5191 5444

Fax: 03 5191 5405


Website: www.bharatclub.org

All Malaysia Malayalee Association (AMMA)

10 Road II, United Garden

4 ¾ Mile, Old Klang Road, 58200 Kuala Lumpur

Tel: 6-03-79811769

H/p: 019-2214740

Global Organization of People of Indian Origin Malaysia

2A, Pearl Court, Jalan Tamby Abdullah,

50470 Kuala Lumpur

Tel: 22724677

Fax: 22746466


Gujarati Association

38, Lorong Maarof, Bangsar Park

59000 Kuala Lumpur

Tel: 6-03-22828798

Fax: 6-03-22828799

Khalsa Diwan Malaysia (KDM)

100/102, Jalan Tun Abdul Razak,

30100 Ipoh, Perak

Tel: 6-05-5275181/5272181

Fax: 6-05-5275181

Malaysian Hindu Sangam

Level 2, Wisma Hindu Sangam

No,67 Jalan PJS 1/48, Taman Petaling Utama 7,

46150 Petaling Jaya. Selangor.

Tel: 03-7784 4668/ 7784 4669 /4244

Fax: 03-7784 7304


Malaysia Sikh Welfare Association

4, Lorong Damai Lima

Off Jalan Aman, 55000 Kuala Lumpur

H/p 013-3301011

Fax: 42601006


86


Malaysia Urdu Association

7 Jalan Kelawar 6/4H, Section 6

40000 Shah Alam, Selangor

Tel: 012-2062537

Fax: 426023169

Malaysian Dravidian Association

No. 4, 2nd Floor, Lorong 6C/91

Taman Shamelin

56100 Kuala Lumpur

Tel: 6-03-92001419

Malaysian Association of Indian University Graduates

24/2B, Pearl Court

Jalan Thambi Abdullah, Brickfield

50470 Kuala Lumpur

Tel: 6-03-22724677

Fax: 6-03-22746466

Malaysia Bengalee Association (MBA)

1 Bengal House, Bartu 1 ½, Jalan Pantai

71000 Port Dickson

Malaysian Indian Congress

6th Floor, Menara Manickavasagam

No. 1, Jalan Rahmat Off Jalan Ipoh

50350 Kuala Lumpur

Tel: 6-03-40424377, 40424540

Fax: 6-03-40427236

Netaji Welfare Foundation

5th Floor, Wisma Mariamman

49 Lebuh Ampang

50100 Kuala Lumpur

Tel: 6-03-20341669

87

Persekutuan Pertubuhan India Muslim Malaysia (Permim)

7.09, 7th Floor, Semua House, Jalan Bunus 6

50100 Kuala Lumpur

Tel: 6-03-26937182

Fax: 6-03-26987182

Sikh Welfare Society Malaysia

No. 4, Lorong Damai Lima, Off Jalan Aman

55000 Kuala Lumpur

Tel: 6-03-2486710

Sindhi Association of Malaysia (SAM)

Lot 336, 3rd Floor, Campbell Shopping Complex

Jalan Dang Wangi

50100 Kuala Lumpur

Tel: 6-03-26921964

Fax: 6-03-26925326

Oriya Welfare Society

739 Taman Desa Permai Pedas

71400 Negeri Sembilan

Tel: 019-6172883

88


Useful Links

High Commission of India, Kuala Lumpur

www.indianhighcommission.com.my/index.php

High Commission of Malaysia, New Delhi

www.kln.gov.my/perwakilan/newdelhi

Malaysian Government Portal

www.malaysia.gov.my

Ministry of International Trade and Industry

www.miti.gov.my/cms/index.jsp?whichSite=MITI

Malaysian Industrial Development Authority

www.mida.gov.my/

Malaysia External Trade and Development Corporation

www.matrade.gov.my/cms/index.jsp

Small and Medium Industries Development Corporation

www.smidec.gov.my/index.jsp

Malaysia Industrial Development Finance Berhad

www.smidec.gov.my/index.jsp

Malaysian Technology Development Corporation

www.mtdc.com.my/

Royal Malaysian Customs

www.customs.gov.my/index.php?lang=en

SIRIM Berhad

www.customs.gov.my/index.php?lang=en

Food Safety and Quality Division, Ministry of Health

www.fsis.moh.gov.my

Malaysian Government Offices

89

MSC Malaysia

www.mscmalaysia.my/

National Productivity Corporation

www.npc.org.my

Malaysia Tourism Promotion Board

www.tourism.gov.my

Malaysia Immigration Office

www.imi.gov.my

Multimedia Development Corporation

www.mdec.com.my/

Federation of Malaysian Manufacturers

www.fmm.org.my

Malaysian International Chamber of Commerce and Industry

www.micci.com

National Chamber of Commerce and Industry Malaysia

www.nccim.org.my

Malay Chamber of Commerce Malaysia

www.dpmm.org.my

Associated Chinese Chambers of Commerce and Industry of

Malaysia

www.acccim.org.my

Malaysian Associated Indian Chambers of Commerce and Industry

www.maicci.org.my

Consortium of Indian Industries in Malaysia

www.ciim.org.my

Industry Chambers

90


Development Regions

Northern Corridor Economic Region

www.ncer.com.my

East Coast Economic Region

www.ecerdc.com

Iskandar Development Authority

www.irda.com.my

91

The Confederation of Indian Industry (CII) works to create and sustain an environment conducive to the growth of industry in India, partnering industry and government alike through advisory and consultative processes.

CII is a non-government, not-for-profit, industry led and industry managed organisation, playing a proactive role in India’s development process. Founded over 113 years ago, it is India’s premier business association, with a direct membership of over 7500 organisations from the private as well as public sectors, including SMEs and MNCs, and an indirect membership of over 83,000 companies from around 380 national and regional sectoral associations.

CII catalyses change by working closely with government on policy issues, enhancing efficiency, competitiveness and expanding business opportunities for industry through a range of specialised services and global linkages. It also provides a platform for sectoral consensus building and networking. Major emphasis is laid on projecting a positive image of business, assisting industry to identify and execute corporate citizenship programmes. Partnerships with over 120 NGOs across the country carry forward our initiatives in integrated and inclusive development, which include health, education, livelihood, diversity management, skill development and water, to name a few.

Complementing this vision, CII’s theme "India@75: The Emerging Agenda", reflects its aspirational role to facilitate the acceleration in India’s transformation into an economically vital, technologically innovative, socially and ethically vibrant global leader by year 2022.

With 64 offices in India, 9 overseas in Australia, Austria, China, France, Germany, Japan, Singapore, UK, USA and institutional partnerships with 211 counterpart organisations in 87 countries, CII serves as a reference point for Indian industry and the international business community.

92

Confederation of Indian IndustryThe Mantosh Sondhi Centre23, Institutional Area, Lodi Road,New Delhi – 110 003 (India)Tel: 91 11 24629994-7 • Fax: 91 11 24626149email: [email protected] • Website: www.cii.in

Confederation of Indian Industry (CII)Southeast Asia Region office

47, Hill Street, SCCCI Building, # 07-02SINGAPORE 179365

Tel : + 65 63334363 Fax: + 65 68830658Email : [email protected] / [email protected]

Website : www.cii.in AND www.bridgesingapore.com

Confederation of Indian Industry


The Malaysian Industrial Development Authority (MIDA) is the Government of

Malaysia’s principal agency for the promotion of manufacturing and services sectors

in Malaysia. MIDA assists companies which intend to invest in the manufacturing and

its related services sectors, as well as facilitates the implementation of their projects.

The wide range of services provided by MIDA includes providing information on the

opportunities for investments, as well as facilitating companies which are looking for

joint venture partners. MIDA also evaluates applications for projects in the

manufacturing and its related services sectors. It also assists companies interested in

venturing abroad for business opportunities.

To further enhance MIDA's role in assisting investors, senior representatives from key

government agencies are stationed at MIDA's Headquarters in Kuala Lumpur to

advise investors on government policies and procedures. MIDA also has overseas

offices including one in Mumbai (India) as well as offices in various States Malaysia.

Please visit www.mida.gov.my for more detailed information on MIDA.

93

MIDAMalaysian Industrial Development Authority

Consortium of Indian Industries in Malaysia (CIIM) was set up to be

the corporate face of India in Malaysia. A need was felt by Indian

companies operating in Malaysia to have a common platform to share

information and opportunities, address issues, brainstorm, network

and establish linkages with various stakeholders in the government

and business in Malaysia. The Confederation of Indian Industry (CII),

an apex body representing Indian business, then initiated this

process, and CIIM was formally launched in Kuala Lumpur by then

Commerce and Industry Minister of India in December 2005.

CIIM is a registered national level body comprising member

companies originating from India and operating in Malaysia.

Members of CIIM are corporate entities representing various

segments of the Indian industry including pharmaceuticals,

automotive, manufacturing, ICT, banking, railways, airlines, trading,

etc.

The High Commissioner of India to Malaysia is the Patron of CIIM.

Please visit www.ciim.org.my for more detailed information on CIIM.

94

Consortium of Indian Industries in Malaysia (CIIM)

Doing Business in Malaysia: Handbook for

Indian Business is a practical guide for

Indian enterprises keen to look at

opportunities in Malaysia. It highlights

expanding trade and investment potential

for India in Malaysia, and outlines key

aspects of the climate for doing business.

The Handbook is an initiative of the High

Commission of India, Kuala Lumpur, in

partnership with the Confederation of

Indian Industry, India , and with the support

of Malaysian Industrial Development

Authority and the Consortium of Indian

Industries in Malaysia .

Documents

Malaysia Handbook