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Joint Statement of the India – Malaysia CEO’s Forum, New Delhi (March 31, 2017)

April 01, 2017

The India – Malaysia CEO Forum held its meeting on March 31, 2017 in New Delhi. The meeting coincided with the visit of Dato’ Seri Mohd. Najib bin Tun Abdul Razak, Hon’ble Prime Minister of Malaysia to India from March 31 – April 4, 2017.

Malaysia is India’s third largest trading partner in ASEAN. Bilateral trade between Malaysia and India stood at US$12.8 billion in 2015-16, as against US$ 16.9 billion in 2014-15. The trade balance is in favor of Malaysia (US$5.4 billion in 2015-16). The Prime Ministers have expressed their aspiration to see this trade increase to US $15 billion in the immediate future.

In terms of investment, there has been significant growth between the two nations in various sectors. The total investments from Malaysia stood at around US$7 billion or more as against total investments of around US$2.5 billion from the Indian side.

There has been a surge in Malaysian private sector initiatives in India, particularly in the infrastructure sector. According to Malaysia’s Construction Industry Development Board (CIDB), as on date, Malaysian companies have completed 53 highway & road projects worth RM 9.3 billion (US$ 2.84 billion) in India. In addition, there are 7 projects valued at RM 1.1 billion (US$ 0.34 billion), which are still under construction. At present, there are around 120 Indian companies including 61 Indian joint ventures, 7 Indian Public Sector Undertakings and 60 Indian IT companies operating in/from Malaysia. Their areas of operation are manufacture of Textiles and Yarn, Drugs and Pharmaceuticals, Glass containers, Automobile associated activities, Specialty Chemicals, Steel Furniture, Rubber Products, Services in Information Technologies, Education, Biotechnology, Healthcare, etc.

The need for fresh investments by public and private sector companies from both sides, in the identified sectors in the two countries was emphasized. In this regard, CEO Forum noted that some hand holding would be needed, which can be provided by Invest India on the Indian side and MIDA on the Malaysian side. Both sides also noted that companies can also look for the possibility of joint-venture in each other's countries or third countries specially in the ASEAN region. They underlined that the private sector initiatives had to be encouraged to take the investment relationship to the next level.

The CEO Forum noted that there exists knowledge deficit on the opportunities available in both countries and underscored the need for greater B to B exchanges, regular meetings of the CEO Forum and organizing trade and Investment Promotion events. CII and MIBC are to initiate these programmes.

Both trade and investment will benefit from the Regional Comprehensive Economic Partnership (RCEP), which aims to be a deep integration trade agreement covering trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement/legal and institutional issues among others. Therefore, the Forum calls for a balanced RCEP which will address both trade and services and be concluded at an early date.

The CEO Forum identified key sectors for further cooperation and as well as the next steps required to boost bilateral economic cooperation. These are summarised below:
  • Infrastructure
    Infrastructure is one of key investment areas for Malaysian companies in India. It was highlighted that Malaysia is additionally looking at residential projects in India and would like to avail of the upcoming opportunities.

    It was pointed out that the Indian side was looking at railway, water treatment and other projects in Malaysia.

    It was also highlighted that the private sector from Malaysia could contribute to road construction, power generation as well as airport and port development. Both sides decided to focus on Greenfield and Brownfield projects in various sectors and work closely in availing of investment opportunities in development of smart cities.

    They also underlined the opportunities arising in India under the PPP initiatives and encouraged the adoption of Swiss challenge method for expeditious and transparent bidding. Reference was made to Hybrid annuity model also.

    India offers good opportunity for Malaysian Pension and Provident Funds to invest in Indian Infrastructure assets – specially brownfield assets in various sectors like road, aviation, power, offering long-term steady returns. Investments could also be made in Indian Infrastructure Funds.

    It was decided that the Confederation of Indian Industry (CII) would facilitate meetings for Malaysian companies with State Governments and the Central Government in India. Additionally, CII’s National Smart City Mission would facilitate meeting with private sector.

    The Malaysian side especially highlighted India’s transparent bid processes: availability of finance and familiarity of contract laws and technical specifications as key attributes, which should encourage greater participation from the Malaysian infrastructure players. This was in the context of much lesser participation of Malaysian companies in India’s infrastructure sector in the earlier years which is now changing with the renewed interest amongst the Malaysian players. In the initial years, Malaysian companies participating in India’s infrastructure program had experienced difficulties, which have been subsequently addressed by the Government of India. This has provided fresh impetus for Malaysian companies to re-look and consider investing in Indian infrastructure projects in a big way.
  • Healthcare
    The Forum noted that there has been an upsurge of Indian investments in the healthcare sector in Malaysia and it was therefore emphasized that this trend needs to be encouraged.

    India and Malaysia have a Universal Healthcare System managed by the Governments along with participation of private medical facilities, which together address the healthcare needs of citizens. Both countries are witnessing a rising inflow of patients from the western world. Yet, the need to provide affordable and accessible healthcare to all remains a challenge. The need is to focus on collaborations and share insights towards making healthcare equitable, more responsive and effective. Six areas for collaboration were highlighted by members:

    A. Non-Communicable Diseases
    Globally over 415 million individuals are battling diabetes and it is Type 2 diabetes in almost 90 percent of the population. Over 69.1 million suffer from diabetes in India and Malaysia with 3.2M Diabetics has one of the highest diabetes prevalence rates amongst adults worldwide.

    Learning from India will be used to work with the local communities in Malaysia to improve screening, early detection, awareness and management of diabetes. Care could be delivered through an evidence based model that combines clinical care with lifestyle interventions, over multiple touch points resulting in better outcomes. A collaborative partnership for the development of Vaccine for Diabetes for would greatly helpful in containing the growing prevalence of diabetes.

    Similarly, the two nations could collaborate on cancer care, rehabilitative medicine and senior living initiatives. Next Generation Sequencing was highlighted as another avenue for potential collaboration. Identification of genes responsible for the congenital disorders, ante & prenatal testing, blood disorders, cancers and diabetes were also heighted as potential areas of collaboration.

    B. Health Manpower Development
    Healthcare is among the most complex and collaborative domains of work practice in the world. Collaborations between the Malaysian and Indian clinical talent would mean a doubling of the size of the pool in terms of scientific background and that could lead to newer insights in clinical care. The Governments should also encourage exchange programs between healthcare educational institutions and provider organizations. Twinning programs for Nursing, Paramedical and Allied healthcare professionals and the development of Simulation Labs would garner greater interest in the curriculums from a potential taskforce and provide overseas employment opportunities for the skilled talent pool.

    The Indian and Malaysian governments must form a Joint Healthcare Taskforce consisting of healthcare professionals from both nations to deliberate and ease processes that would permit doctors to practice in either nation after necessary licensing. Furthermore, to address talent gaps and ensure continuous relevance, innovative skilling and up-skilling programs must be initiated for health manpower. This could also foster greater employment opportunities for the youth.

    C. Joint Cord Blood Repository
    A joint cord-blood repository between India and Malaysia for both private and public users must be considered as Cord Blood Stem Cell Therapy is a greatly preferred option for treating blood disorders including haemophilia, thalassemia and various blood cancers. Cord blood can be used in treating new born children with asphyxia.

    D. Epidemiology and Data Mining
    Epidemiology can be harnessed to play a pivotal role in managing threats to public health and control of diseases especially ones like cancer, cardiovascular disease, respiratory diseases, tuberculosis, maternal & child health and many new infectious diseases. The Indian and Malaysian governments could encourage firms from both the countries to work together to provide efficient health guidance by sharing epidemiological studies and inferences. Additionally, the growing usage of digital healthcare delivery conduits is creating immense data and the combined information could prove to be a significant enabler for joint research programs.

    E. Indian Traditional Medicine
    The Forum members particularly highlighted the close collaboration in Indian Traditional Medicine where a MoU has been signed between India and Malaysia and regular annual meetings are being held. They welcomed the move of the Government of Malaysia to invite Ayurveda and Siddha practitioners to Malaysia, and the University of UTAR for starting, for the first time, Ayurveda degree courses in Malaysia. They underlined the importance of the Government of Malaysia for facilitating the availability of Ayurveda, Siddha and other Indian traditional medicines for treatment.

    F. Diagnostics
    Members highlighted the area of diagnostics where collaboration could be considered since this would be a highly cost-effective approach for health management. Tele medicine could be used to use the capabilities that exist and this would also provide to be a cost-effective partnership.
  • Education
    The education sector was identified as an area where possibilities for engagement were huge because of the economics and historical connection between the two countries.

    Both sides took note of more than 1500 students coming from Malaysia to India every year for studying medicine and expressed the need for recognition of all medical degrees by accredited institutions/universities in both countries.

    They welcomed the initiative to have a bilateral MoU between India and Malaysia on equivalence of degrees in non-medical areas of education, including in engineering. This was an important step to ensuring that education in both countries is available for the students of each other’s country. This step, the Forum believed would help facilitate the following:

    1. Promotion of enhanced opportunities for student and scholar mobility
    2. Development of transnational education (TNE)

    To facilitate the above it is recommended that an India-Malaysia Education Dialogue be set up. A good example and a model, which could be emulated for bilateral progress is the US-India Higher Education Dialogue.

    The Forum members also recognized the strength of India in English-language education and recalled the draft MoU being negotiated between the two sides to recruit Indian teachers for English-language education in Malaysia. They called for its early signing.

    It was mentioned that opportunities existed to enhance cooperation between Malaysian and Indian Institutions of Higher Learning in the sphere of Trans-National Education (TNE). Malaysia has a track record in forging international collaborations with reputed Universities from all over the world. Particularly from the UK, Australia and the United States. They welcomed collaboration with Indian institutions/universities.
  • SME
    SMEs have been given greater prominence and importance in economic development as they are the sources of innovation, main collective providers of employment as well as providing better stability during uncertainties facing the economy. They are the fundamental driver for the economy in terms of employment, GDP and entrepreneurship. The agility among SMEs spurs dynamism in this rapidly changing business environment, making them an important force behind inclusive economic transformation agenda of the country.

    The growth of SMEs in both countries can be catalysed by leveraging on 3Ds; namely Disruptive technology, Digitisation of SMEs and Diverse financial alternatives. Some head starts have been made in integrating SMEs in both countries into Industrial Revolution 4.0. In Malaysia, the Digital Free Trade Zone (DTFZ) was launched to empower SMEs towards internationalisation. This platform provides more opportunities for SMEs of both countries to be plugged into the global supply chain of large companies. In addition, the rapid expansion of alternative financing landscape for SMEs, including Equity Crowd Funding (ETF) and the peer-to-peer financing platform as well as the soon-to-be launched Leading Entrepreneurs Accelerator Platform (LEAP), a listed private market on the Malaysia Bourse provides better access to funding for SMEs.

    Indian members suggested that the two countries could cooperate to build capacity of SMEs in Malaysia through training and entrepreneurship development etc. This would help Malaysian SMEs plug into the Indian supply chain especially in pharmaceuticals, biotech and IT sectors. CII and MIBC were requested to facilitate the process.

    The Malaysian side requested for an inclusion of a member from the SME sector in the CEO Forum from the Indian side.
  • Civil Aviation and Tourism
    Tourism was highlighted as one of the key areas which facilitates people to people connect. India ranks as the 5th largest tourist source for Malaysia. Hence, there is a need to project India as a tourist destination to Malaysians with emphasis on regional circuits.

    Members emphasized on the need to encourage Visa-free travel for Indians and Malaysians as travel and tourism in both countries contributed to their economic growth. Tourism has multiplying economic effect on both the countries.

    Additionally‎, Malaysia should support and champion the introduction of the ASEAN Common Visa for travellers from outside the region, perhaps starting with the nationals of ASEAN Dialogue Partners, including India. The ASEAN Common Visa would encourage such tourists traveling in other ASEAN countries to also visit Malaysia and contribute to higher receipts from travel and tourism.

    It was decided that CII and MIBC will facilitate inclusion of visits to tourist places as part of business delegation visits to both countries.

    As an extension to the Government of India’s focus on aviation, it was suggested by the Malaysian side that the following key areas be considered.
    • Improve & Expand Bilateral Rights: There is a need to review the Bilateral Air Services Agreement between India and Malaysia to expand the number of slots for airlines to operate between the two countries. The Malaysian side emphasized that the Malaysian carriers could be given more rights including travel to other countries through India.
    • New Routes: To add new non-metro cities into the existing approved 18 non-metro cities to which Malaysian carriers can fly.
    • Waiver of 20 Aircrafts Ruling: The members thanked the Government of India for modifying the 5/20 rule to 0/20. The waiver of the 5-year rule will help to enhance investment and economic growth between both countries. Carriers will be able to fulfill the gaps and increase connectivity between India and Malaysia and the ASEAN region. It would be of immense benefit if the 20 aircrafts ruling is also waived in the near future.

    This will generate greater economic contribution for both countries via tourist arrivals, people to people communication, medical tourism, education, infrastructure development and socio-economic growth:
  • Others
    The Forum Members also agreed that specific sectors like manufacturing, Industrial corridors in India and SMEs needs to be nourished and given special focus including in the context of India’s Make in India initiative and Malaysia’s focus on SMEs. The private sector initiatives should be undertaken with greater intensity than what is currently happening in order to identify the opportunities available in both countries.

    The Forum members agreed that laws and regulations should be made easier by the governments to ensure that professionals on both sides can practice in each other's country without impediments.
  • Sectoral Cooperation
    It was agreed that separate Working Groups would be set up on Infrastructure, Healthcare and Education to suggest recommendations and strategies to expand cooperation in the sectors identified above and to take up any impediments to trade and investment with both Governments. A joint presentation by each of the Working Groups would be made at the next meeting.
  • Conclusion
    The Forum is honoured to be tasked with presenting recommendations to both Governments, and values the opportunity to work with them on these initiatives. The Forum warmly welcomes the interest displayed by both Governments to partner with Industry to deliver mutually beneficial outcomes that will take our bilateral relationship to the next level.

    It was agreed to hold the meeting of CEO Forum bi-annually, alternatively in India and Malaysia. The Malaysian side offered to host the next meeting in Kuala Lumpur towards the end of 2017.

    The CEO Forum expressed its gratitude to CII for making excellent arrangements for the meeting.
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