India, Malaysia to intensify trade ties

By Amit Baruah

KUALA LUMPUR, MAY 15. As many as 15 agreements were signed between Malaysian and Indian companies today, laying the foundation for a more focussed trade and business relationship.

Malaysia also became the first country to which India offered the use of the GSLV to launch its own satellites following an accord between Antrix Corporation, an ISRO-linked company, and Astronautic Technology, a Malaysian Government- backed company.

The agreements include a renewal of collaboration between the Indian Oil Corporation and Petronas, another between HMT and Orion Java, Malaysia, to set up a watch assembly plant and an MoU between the Confederation of Indian Industry (CII) and the Asian Strategy and Leadership Incorporated (ASLI) to promote bilateral trade and information exchange between the two countries.

An issue which seems to have cast a shadow over the ongoing visit of the Prime Minister, Mr. A. B. Vajpayee, is Malaysia's concern at increased Indian duties on the imports of palm oil.

The Malaysian side has used every opportunity to express concerns on the issue while the Indian side, which at one time appeared willing to reduce duties by 10 per cent on the import of crude palm oil, said the matter would be reviewed after returning home.

Addressing a meeting of the Malaysia-India Business Forum, Mr. Vajpayee said the two countries should set a target of doubling the current trade of $2.5 billion in the next three years.

On the palm oil issue, he told the gathering which included the Malaysian Prime Minister, Dr. Mahathir Mohamad. : ``We have explained (to the hosts) our decisions on import tariffs for palm oil have been determined entirely in consonance with WTO obligations. Just as Malaysia has to protect its Malaysian palm oil plantations over falling prices, we have to take care of our own farmers who have experienced similar difficulties.''

``However, guided by the considerations of strengthening solidarity with our ASEAN friends, we have now decided to review the import duty on palm crude,'' Mr. Vajpayee said. The Prime Minister invited Malaysian companies to actively participate in India's plan for infrastructure development. (Already, Malaysian companies are involved in 13 road-building projects in India apart from the development of some ports).

Fourteen Indian firms had started operating in the Multimedia Super Corridor, a project inspired by Dr. Mahathir himself. However, Mr. Vajpayee said more Indian companies wanted to locate themselves in Malaysia.

On the MoU in the area of space technology, Mr. Vajpayee said India, following the successful launch of the GSLV, became part of a select group of countries, to have such a capability. ``India is willing to share this expertise in the peaceful applications of space research with Malaysia and other developing countries.''

In a bid to correct the trade imbalance (heavily in Malaysia's favour), Mr. Vajpayee said the Government had decided to offer a $50 million credit line for imports of project-related and industrial good into Malaysia from India.

Dr. Mahathir said Indian software companies would have a role to play in the second stage of the Super Corridor project. The content industry was another area in which Indian companies could contribute, he maintained.

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