India-Malaysia free trade deal to take effect in July

Deepening its growing links with its east Asian neighbours, India today announced ''a turning point'' in its relations with Malaysia, with the two nations agreeing to implement a crucial free trade deal from next July.

The much-awaited India-Malaysia Comprehensive Economic Cooperation Agreement (CECA), would be signed in January and take effect from July 2011, boosting bilateral trade and doubling it to $15 billion by 2015.

Indian Prime Minister Manmohan Singh, on the second-leg of his east Asian tour – which has taken him to Tokyo and will culminate in Hanoi later this week – met his Malaysian counterpart Mohammed Najib Tun Abdul Razak in Kuala Lumpur. The two premiers announced the final go-ahead for the landmark agreement.

The CECA would ensure freer movement of goods, services and investments between the two countries. ''India welcomes greater investment from Malaysia in the infrastructure and manufacturing sectors and Indian companies would also ant to do business here,'' declared Singh. The two leaders also launched the CEO's Forum, which would boost ties between industrial groups in the two countries.

Razak said he told his Indian counterpart that Malaysia was ready for ''deeper and more intensive relationship with India.'' Both nations are seeking closer cooperation and participation in the development of infrastructure. Indian firms have already invested over a billion dollars in nearly a hundred projects in Malaysia, generating over 12,000 jobs.

The two Asian countries are also seeking stronger ties in energy – including renewable – banking and finance and information technology.

Dr Singh said India was keen to learn about Islamic banking in Malaysia and he would ask the Reserve Bank of India, the country's central bank, to examine the nation's experience.