COUNTRY PROFILE REPORT OF ITJ DIVISION, DGCI&S

INDIA-MALAYSIABILATERAL TRADE RELATIONS

INTRODUCTION&BRIEF ECONOMIC OVERVIEW

1. The Federation of Malaysia, situated in South-East Asia, consists of 13 states. Eleven of these are in
Peninsular Malaysia, in the southern part of the Kra peninsula (with Thailand to the north and the island of
Singapore to the south), and two, Sabah and Sarawak, are on the north coast of the island of Borneo, two-thirds
of which comprises the Indonesian territory of Kalimantan. Sarawak also borders Brunei, a coastal enclave in
the north-east of the state.Malaysia is a member of the UN, WTO, BIS, the Commonwealth, Asian
Development Bank, Colombo Plan, APEC, ASEAN, Mekong Group and the Organization of Islamic
Conference.This report emphasises on India-Malaysiabilateral trade relations, inter-alia.

2. Malaysia is the world's 23rd-largest exporter and 25th-largest importer. However, economic inequalities
exist between different ethnic groups. The Chinese make up about one-quarter of the population, but account
for 70 per cent of the country's market capitalisation. Chinese businesses in Malaysia are part of the larger
bamboo network, a network of overseas Chinese businesses in the Southeast Asian market sharing common
family and cultural ties. IMF Executive Board Concluded on March 3, 2025 that Malaysia’s economic
performance has improved significantly in 2024. The economy grew by 5.2 percent (y/y) in the first three
quarters of 2024, supported by strong private consumption, buoyant investment, improvements in external
demand for electrical and electronic products, and a recovery in tourism. Labour market conditions have been
strong, with the unemployment rate low at 3.2 percent in 2024 Q3. Meanwhile, inflation has been stable at
around 2 percent, and the ringgit appreciated against the U.S. dollar by 2.6 percent in 2024.

A snapshot of Malaysia’s select economic indicators is as below.

TABLE - 1

Selected Economic and Financial Indicators, 2020–30

Proj.
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
1/

Real GDP (percent -5.5 3.3 8.9 3.6 5.0 4.7 4.4 4.0 4.0 4.0 4.0
change)
Total domestic -4.8 3.8 9.5 4.7 6.1 4.7 4.0 3.6 3.6 3.6 3.4
demand
Private consumption -3.9 1.8 11.3 4.7 5.3 4.5 3.9 3.4 3.9 3.8 3.7
Public consumption 4.1 5.8 5.1 3.3 4.3 3.5 2.7 2.4 2.3 2.3 2.3
Private investment -11.9 2.8 7.2 4.6 12.0 6.0 5.1 4.0 4.0 4.0 4.0
Public gross fixed -21.2 -11.0 5.3 8.6 11.2 4.0 2.8 2.3 2.1 2.0 2.1
capital formation
Net exports -1.0 -0.3 -0.1 -0.9 -0.8 0.2 0.5 0.6 0.5 0.6 0.7
(contribution to
growth, percentage
points)

Output gap (in -4.0 -1.1 2.5 1.3 1.1 0.7 0.4 0.0 0.0 0.0 0.0
percent)

Saving and investment

(in percent of GDP)
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Gross domestic 19.7 22.1 23.6 22.5 22.5 22.5 22.6 22.6 22.5 22.5 22.5
investment
Gross national saving 23.8 26.0 26.8 24.0 24.5 24.7 25.0 25.3 25.4 25.5 25.5

Fiscal sector (in

percent of GDP) 2/
Federal government -6.2 -6.4 -5.5 -5.0 -4.3 -3.8 -3.8 -3.8 -3.8 -3.8 -3.8
overall balance
Revenue 15.9 15.1 16.4 17.3 16.5 16.2 15.4 15.1 14.8 14.6 14.4
Expenditure and net 22.0 21.5 22.0 22.3 20.8 20.0 19.2 18.9 18.6 18.4 18.2
lending
Federal government -7.5 -6.7 -7.8 -6.6 -4.9 -4.1 -3.7 -3.4 -3.0 -2.8 -2.6
non-oil primary
balance
Consolidated public -7.3 -8.3 -6.0 -5.9 -8.4 -6.7 -6.8 -6.9 -6.8 -6.9 -6.9
sector overall balance
3/
General government 67.7 69.2 65.5 69.7 69.6 68.9 68.7 69.1 69.3 69.6 69.8
debt 3/
Of which: federal 62.0 63.3 60.2 64.3 64.4 63.7 63.5 63.8 64.1 64.3 64.5
government debt

Inflation and
unemployment (in
percent)
CPI inflation, annual -1.2 2.5 3.4 2.5 1.8 2.6 2.3 2.0 2.0 2.0 2.0
average
CPI inflation, end of -1.4 3.2 3.8 1.5 1.7 3.8 2.0 2.0 2.0 2.0 2.0
period
CPI inflation 1.1 0.7 3.0 3.0 1.8 2.4 2.2 2.0 2.0 2.0 2.0
(excluding food and
energy), annual
average
CPI inflation 0.7 1.1 4.1 1.9 1.6 3.8 2.0 2.0 2.0 2.0 2.0
(excluding food and
energy), end of period
Unemployment rate 4.5 4.6 3.9 3.4 3.2 3.2 3.2 3.2 3.2 3.2 3.2
Macro financial
variables (end of
period)
Broad money 4.9 5.6 4.0 5.8 7.1 7.6 6.7 5.9 5.9 5.9 5.9
(percentage change) 4/
Credit to private 4.0 3.8 3.0 5.2 6.2 6.1 6.0 5.9 5.9 5.9 5.9
sector (percentage
change) 4/
Credit-to-GDP ratio 144.8 137.7 122.4 126.7 125.7 123.9 123.1 123.1 123.1 123.1 123.1
(in percent) 5/ 6/
Overnight policy rate 1.75 1.75 2.75 3.00 … … … … … … …
(in percent)
Three-month 1.9 2.0 3.6 3.7 … … … … … … …
interbank rate (in
percent)

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Nonfinancial 109.7 109.0 97.5 101.2 … … … … … … …
corporate sector debt
(in percent of GDP) 7/
Nonfinancial 2.3 2.6 2.4 2.5 … … … … … … …
corporate sector debt
issuance (in percent of
GDP)
Household debt (in 93.1 88.9 80.9 84.2 … … … … … … …
percent of GDP) 7/
Household financial 204.5 191.9 167.3 174.3 … … … … … … …
assets (in percent of
GDP) 7/
House prices 1.2 1.9 3.9 3.8 … … … … … … …
(percentage change)
Exchange rates
(period average)
Malaysian 4.19 4.14 4.40 4.56 … … … … … … …
ringgit/U.S. dollar
Real effective -3.5 -1.3 -1.4 -2.5 … … … … … … …
exchange rate
(percentage change)
Balance of payments
(in billions of U.S.
dollars) 5/
Current account 14.1 14.5 13.0 6.2 8.7 10.2 12.0 14.3 16.1 17.6 19.4
balance
(In percent of GDP) 4.2 3.9 3.2 1.5 2.0 2.2 2.4 2.7 2.9 3.0 3.1
Goods balance 32.7 42.9 42.6 29.9 26.3 29.3 31.8 33.9 36.5 39.2 43.7
Services balance -11.2 -15.8 -13.2 -9.5 -4.4 -4.1 -3.1 -1.7 -1.3 -1.0 -1.5
Income balance -7.4 -12.5 -16.3 -14.2 -13.2 -14.9 -16.7 -17.9 -19.2 -20.6 -22.8
Capital and financial -18.5 3.8 1.8 -3.4 -6.0 0.2 -3.0 -5.0 -6.2 -7.1 -8.2
account balance
Of which: Direct 0.7 7.5 2.9 0.0 -1.3 2.0 2.1 2.2 2.4 2.5 2.6
investment
Errors and omissions -0.1 -7.3 -2.7 -7.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Overall balance -4.6 11.0 12.1 -4.5 2.7 10.4 9.0 9.3 9.9 10.6 11.2

Gross official reserves 107.6 116.9 114.7 113.5 116.2 126.6 135.6 144.9 154.8 165.4 176.6
(US$ billions) 5/
(In months of 5.5 4.9 5.4 4.6 4.4 4.6 4.7 4.8 4.9 4.9 5.0
following year's
imports of goods and
nonfactor services)
(In percent of short- 117.6 120.8 104.9 100.3 99.4 98.3 97.2 97.0 97.3 97.9 98.9
term debt by original
maturity)
(In percent of short- 91.9 93.5 84.6 80.7 78.7 79.4 79.0 79.2 79.7 80.5 81.5
term debt by
remaining maturity)
Total external debt (in 238.8 258.7 259.6 270.6 284.6 305.1 324.4 342.8 361.1 379.2 397.2
billions of U.S.
dollars) 5/
(In percent of GDP) 70.8 69.3 63.8 67.8 65.1 65.3 65.1 64.9 64.4 63.8 63.0

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 Of which: short-term 38.3 37.4 42.1 41.8 41.1 42.2 43.0 43.6 44.1 44.6 44.9
(in percent of total,
original maturity)
short-term (in 49.1 48.3 52.2 51.9 51.9 52.3 52.9 53.4 53.8 54.2 54.5
percent of total,
remaining maturity)
Debt service ratio 5/
(In percent of exports 13.6 10.5 9.7 11.8 12.1 12.1 10.1 9.8 9.7 9.6 9.5
of goods and services)
8/
(In percent of exports 14.4 11.4 10.3 12.7 12.9 12.9 10.7 10.4 10.3 10.2 10.0
of goods and
nonfactor services)
Memorandum items:
Nominal GDP (in 1,418 1,549 1,794 1,823 1,952 2,099 2,241 2,373 2,512 2,660 2,817
billions of ringgit)
Sources: Data provided by the authorities; CEIC Data; World Bank; UNESCO; and IMF,
Integrated Monetary Database, and staff estimates.
1/ Data used in this report for staff analyses are as of January 29, 2025, unless otherwise noted.
2/ Cash basis.
3/ Consolidated public sector includes general government and nonfinancial public enterprises (NFPEs).
General government includes federal government, state and local governments, and statutory bodies.
4/ Based on data provided by the authorities, but follows compilation methodology used in IMF's Integrated
Monetary Database. Credit to private sector in 2018 onwards includes data for a newly licensed commercial
bank from April 2018. The impact of this bank is excluded in the calculation of credit gap.
5/ IMF staff estimates. U.S. dollar values are estimated using official data published in national
currency.
6/ Based on a broader measure of liquidity. Credit gap is estimated on quarterly data from 2000, using one-
sided Hodrick-Prescott filter with a large parameter.
7/ Revisions in historical data reflect the change in base year for nominal GDP (from 2010=100 to 2015=100).
8/ Includes receipts under the primary income account.

FOREIGN TRADE

3. As per recent available inputs on WITS (World Integrated Trade Solution), the five major merchandise
export partners of Malaysia are Singapore China, United States, Japan and Hong Kong. On the other hand five
major import partners of Malaysia are China, Singapore, Other Asia Nes., United States and Japan. Major five
exported goods of Malaysia are (i) Monolithic integrated circuits, digital, (ii) Petroleum oils, etc., (excl.
crude); preparation, (iii) Natural gas, liquefied/Palm oil (excl. crude) and liquid fractions, (iv) Parts of
electronic integrated circuits and mic. On the other hand major five imported goods of Malaysia are(i)
Monolithic integrated circuits, digital, (ii) Petroleum oils, etc., (excl. crude); preparation, (iii) Petroleum oils
and oils obtained from bituminous, (iv) Parts of electronic integrated circuits and mic. (v) Other coal, not
agglomerated, nes.

4. Malaysia’s total exports globally in 2020 were of the order of US$ 234,050million.It had scaled upto US$
329,454 million in 2024. Exports from Malaysia had steeply increased by27.85% in the year 2021just after the
initial serious impact of Covid-19 pandemic followed by another 17.70% increase in 2022. During the period
from 2020 to 2024, the annual average compound rate of growth of exports was8.92%.

5. Malaysia’s total imports from the world in 2020 were of the order of US$ 190,405million and had touched
US$ 299,514million mark in 2024.During the period from 2020 to 2024, the annual average compound rate of
growth of imports was 11.99%.
6. Malaysia enjoyed an overall Balance of Trade surplus from 2020to 2024except the year 2021. During the
period from 2020 to 2024, the annual average compound rate of growth of total volume of trade was 10.33%.
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 TABLE - 2

MALAYSIA'S TOTAL EXPORTS AND IMPORTS, VOLUME OF TRADE

AND BALANCE OF TRADE BETWEEN 2020 TO 2024
(Value in USD Million)
Percentage
Year Exports Percentage Imports Percentage Volume Growth in Balance
Growth in Growth in of Vol. of of
Exports Imports Trade Trade Trade
2020 234050 190405 4,24,455 43645
2021 299230 27.85 328250 72.40 6,27,480 47.83 -29020
2022 352188 17.70 293941 -10.45 6,46,129 2.97 58247
2023 312605 -11.24 265638 -9.63 5,78,243 -10.51 46967
2024 329454 5.39 299514 12.75 6,28,968 8.77 29940

Annual
Compound
Growth
Rate 8.92 11.99 10.33

NOTE : Figures relate to calendar year (January to December)

SOURCE : UN COMTRADE PUBLICATION

Figure -1

Malaysia's Exports, Imports and Balance of Trade 2020-

2024
400000
350000
300000
250000
USD Mln

200000
150000
100000
50000
0
2020 2021 2022 2023 2024
-50000

Exports Imports Balance of Trade

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BILATERAL TRADE WITH INDIA

Merchandise Trade

7. India and Malaysia have cultivated a dynamic and growing trade relationship, driven by strategic economic
partnerships and mutual interests. India and Malaysia have had long-standing commercial links dating to the
pre-Christian era. In modern times, Indian industry has been associated for three decades with the
transformation of Malaysia from an exporter of primary products into an industrialized and broad-based
economy. Malaysia ranked 15th as an export destination of India in FY 2023-24. India had exported to Malaysia
almost 1.66% of its total export value in FY2023-24. In the same financial year imports from Malaysia was
1.89% of India’s total import value. Almost 1.80% of India’s total international trade value of goods was
between India and Malaysia as has been recorded in DGCI&S data base for FY 2023-24.

8. Indo-Malaysia total volume of bilateral trade in FY 2019-20 was of the order of US$ 16,146.97 million. It
had scaled to US$ 20,016.28 million in FY 2023-24. The annual compound growth rate of total volume
comprising both exports and imports during the period from 2019-20 to 2023-24 had been of the order of
5.52%.

9. It is seen from the available figures that between 2019-20 and 2023-24, India has had a deficit Balance of
Trade with Malaysia. It has been observed that exports from India to Malaysia increased by 15.47% in FY2021-
22.The annual average compound rate of growth of Exports was 3.35% during the period under review. On the
other hand, imports from Malaysia to India increased steeply by48.38% in FY 2021-22. During the period from
2019-20 to 2023-24, the annual average compound rate of growth of imports was6.86%.
A snapshot of India’s merchandise trade statistics with respect to Malaysia is presented in Table 3 Figure 2.

TABLE - 3
INDIA'S MERCHANDISE EXPORTS & IMPORTS WITH RESPECT
TOMALAYSIA FY 2019-2020 to 2023-2024

(Value in USD Million)

Exports Imports Percentage
from India Percentage from Percentage Volume Growth in Balance
to Growth in Malaysia Growth in of Vol. of of
Year Malaysia Exports to India Imports Trade Trade Trade
2019-20 6364.69 9782.28 16146.97 -3417.59
2020-21 6057.70 -4.82 8373.05 -14.41 14430.75 -10.63 -2315.35
2021-22 6995.06 15.47 12424.2 48.38 19419.26 34.57 -5429.14
2022-23 7156.21 2.30 12734.94 2.50 19891.15 2.43 -5578.73
2023-24 7262.17 1.48 12754.11 0.15 20016.28 0.63 -5491.94
Annual
Compound
Growth
Rate 3.35 6.86 5.52
NOTE : Figures relate to Financial Year (April to March)
SOURCE : DGCI&S, M/oC&I
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 Figure - 2

India's Exports, Imports Balance of Trade with respect to Malaysia 2019-20 to 2023-24

15000.00

10000.00
INR Crores

5000.00

0.00
2019-20 2020-21 2021-22 2022-23 2023-24

-5000.00

-10000.00

Exports from India to Malaysia Imports from Malaysia to India Balance of Trade

10. Additionally from Tables 4 & 5 presented below the following are stated:

a. (i) Petroleum Products (ii)Aluminium, Products of Aluminium and (iii) Buffalo Meat had occupied the
top three slots in India’s exports to Malaysia in FY 2023-24.Petroleum Products had occupied 23.47% share
of India’s total exports to Malaysia in FY2023-24.

b. (i)Petroleum: Crude (ii)Vegetable Oils and (iii)Electronic Components were the three major commodities
in India’s imports list from Malaysia in the year 2023-24, India had imported a significant amount of
Petroleum Crude from Malaysia with a share of 21.31% of total imports from Malaysia recorded in 2023-24.

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 TABLE -4
INDIA'S MAJOR ITEMS OF MERCHANDISE EXPORTS TO MALAYSIA
2019-2020 TO 2023-2024 AND THEIR GROWTH RATES
(Value in USD Million)
Name of the
Sl. Merchandise Annual Growth
No. Commodities Value of Exports Rates
2019- 2020- 2021- 2022- 2023- 20-21 21-22 22-23 23-24
20 21 22 23 24 over over over over
2019- 2020- 2021- 2022-
20 21 22 23
1 Petroleum Products 1286.34 1184.08 2047.31 1401.62 1704.22 -7.95 72.90 -31.54 21.59
Share in total export 20.21 19.55 29.27 19.59 23.47
Aluminium,
Products of
2 Aluminium 1272.88 1224.15 267.47 786.46 1095.14 -3.83 -78.15 194.04 39.25
Share in total export 20.00 20.21 3.82 10.99 15.08
3 Buffalo Meat 378.57 383.07 444.73 534.03 577.35 1.19 16.10 20.08 8.11
Share in total export 5.95 6.32 6.36 7.46 7.95
Electric Machinery
4 and Equipments 96.30 98.09 68.82 208.79 296.59 1.86 -29.84 203.39 42.05
Share in total export 1.51 1.62 0.98 2.92 4.08
5 Organic Chemicals 485.41 326.60 448.97 496.36 230.23 -32.72 37.47 10.56 -53.62
Share in total export 7.63 5.39 6.42 6.94 3.17
Ship, Boat and
6 Floating Structures 198.93 264.87 366.80 36.08 209.23 33.15 38.48 -90.16 479.91
Share in total export 3.13 4.37 5.24 0.50 2.88
7 Spices 106.39 116.89 124.49 139.55 147.44 9.87 6.50 12.10 5.65
Share in total export 1.67 1.93 1.78 1.95 2.03
Gold and Other
Precs. Metl.
8 Jewellery. 74.29 49.90 105.61 173.25 136.64 -32.83 111.64 64.05 -21.13
Share in total export 1.17 0.82 1.51 2.42 1.88
Misc. Processed
9 Items 14.29 47.07 95.41 112.09 121.11 229.39 102.70 17.48 8.05
Share in total export 0.22 0.78 1.36 1.57 1.67
Zinc and Products
10 of Zinc 25.96 212.39 45.01 153.13 116.07 718.14 -78.81 240.21 -24.20
Share in total export 0.41 3.51 0.64 2.14 1.60
Total export to
MALAYSIA 6364.69 6057.70 6995.06 7156.21 7262.17 -4.82 15.47 2.30 1.48
NOTE : Figures relate to each Financial Year (April to March)
SOURCE : DGCI&S, M/o C&I

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 TABLE -5
INDIA'S MAJOR ITEMS OF MERCHANDISE IMPORTS FROM MALAYSIA
2019-2020 TO 2023-2024 AND THEIR GROWTH RATES
(Value in USD Million)
Name of the
Sl Merchandise
. Commodities Value of Imports Annual Growth Rates
N 20-21 21-22 22-23 23-24
o. 2019- 2020- 2023- over over over over
20 21 2021-22 2022-23 24 2019- 2020- 2021- 2022-
20 21 22 23
2717.3 119.0
1 Petroleum: Crude 1651.11 897.79 1099.87 1240.29 7 -45.63 22.51 12.77 9
Share in total imports 16.88 10.72 8.85 9.74 21.31
2443.6 -
2 Vegetable Oils 1878.92 2281.86 4420.79 3608.05 8 21.45 93.74 -18.38 32.27
Share in total imports 19.21 27.25 35.58 28.33 19.16
Electronic 113.4
3 Components 114.17 140.98 239.27 361.05 770.53 23.48 69.72 50.90 1
Share in total imports. 1.17 1.68 1.93 2.84 6.04
Computer
Hardware,
4 Peripherals 371.60 414.22 633.22 640.64 676.55 11.47 52.87 1.17 5.61
Share in total import 3.80 4.95 5.10 5.03 5.30
Copper And Prod
5 Made of Copper 561.94 206.11 397.21 360.99 433.12 -63.32 92.72 -9.12 19.98
Share in total import 5.74 2.46 3.20 2.83 3.40
Plastic Raw
6 Materials 182.77 256.34 327.29 391.37 412.52 40.25 27.68 19.58 5.40
Share in total import 1.87 3.06 2.63 3.07 3.23
-
7 Organic Chemicals 362.30 360.96 771.46 604.39 381.22 -0.37 113.72 -21.66 36.92
Share in total import 3.70 4.31 6.21 4.75 2.99
Aluminium, Prods.
8 of Aluminium 365.20 263.12 214.61 240.95 346.84 -27.95 -18.44 12.27 43.95
Share in total import 3.73 3.14 1.73 1.89 2.72
-
9 Iron and Steel 297.86 279.19 284.49 375.05 322.97 -6.27 1.90 31.83 13.89
Share in total import 3.04 3.33 2.29 2.95 2.53
1 Ship, Boat and
0 Floating Structures 178.73 277.74 74.22 202.86 307.16 55.40 -73.28 173.32 51.41
Share in total import 1.83 3.32 0.60 1.59 2.41
Total import from 12754.
MALAYSIA 9782.28 8373.05 12424.20 12734.94 11 -14.41 48.38 2.50 0.15
NOTE : Figures relate to each Financial Year (April to March)
SOURCE : DGCI&S, M/o C&I

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Rights of permission for reproduction in part or entirely of these official papers published in the Indian
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700 107.
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