India and Malaysia have been in talks for some time now regarding a free trade agreement (FTA) between the two countries. This agreement would aim to increase trade and investment between India and Malaysia and boost economic growth in both countries.
The FTA negotiations were initiated in 2010 but were put on hold due to disagreements over various issues, including India`s trade deficit with Malaysia. However, in 2018, the two countries resumed talks and have been making progress towards finalizing the FTA.
The proposed FTA would cover goods, services, and investments. It would eliminate tariffs on a wide range of goods, making them more affordable and accessible to consumers in both countries. It would also open up opportunities for businesses to expand their operations and invest in each other’s markets, thus creating jobs and stimulating economic growth.
One major benefit of the India-Malaysia FTA would be the increased access to each other’s markets. India’s large population and growing economy make it an attractive market for Malaysian businesses looking to expand their customer base. Similarly, Malaysia’s strategic location and well-developed infrastructure make it an ideal base for Indian companies seeking to access the Southeast Asian market.
The FTA would also help to address some of the trade imbalances between the two countries. India has a significant trade deficit with Malaysia, which means it imports far more goods from Malaysia than it exports to the country. The FTA would help to increase India’s exports to Malaysia, thus reducing the trade deficit.
However, there are also concerns that the FTA could lead to job losses in certain sectors in both countries. For example, Indian textile manufacturers may face stiff competition from cheaper Malaysian imports, while Malaysian palm oil producers could be undercut by Indian imports. It is important for both countries to carefully consider the potential impacts on their respective industries before finalizing the agreement.
In conclusion, the India-Malaysia FTA has the potential to be a significant boost to both countries’ economies. It would increase trade and investment, open up new markets, and help to address trade imbalances. However, it is important to carefully consider the potential impacts on specific industries and ensure that the agreement is beneficial for all parties involved.