NEW DELHI, Dec 20 (Bernama) -- Datuk Seri Abdullah Ahmad Badawi saidMonday that Malaysia and India must now work towards greater economic andtrade cooperation, but cautioned that bilateral trade should move awaytraditional items like crude petroleum and palm oil.
He said that enhanced cooperation in the economic area should culminatein, and be catalysed by, some form of free trade agreement between KualaLumpur and New Delhi.
The Prime Minister said that just like India, which was increasinglylooking east for trade and investment partners, Malaysia was increasinglylooking west, precisely towards places like India and West Asia.
"Let me be patently clear. I am here to build new bridges, construct neweconomic alliances and generate fresh economic cooperation...in the causeof our common future in an increasingly competitive world," he said in hiskeynote address at the Malaysia-India Business Forum here.
Abdullah said that a further strengthening of existing economic tiesbetween the two countries could surely focus on sectors where India hadits strengths, such as information and communication technology (ICT),machinery and engineering, and pharmaceuticals, which were being activelypromoted in Malaysia.
"We also welcome investment by Indian companies with the technicalexpertise in high technology and knowledge-driven industries," he said.
Elaborating on trade, the Prime Minister, who is on a five-day visit toIndia, believed there was considerable scope for increasing two-way tradeand broaden the product composition to reflect the domestic development ofthe two countries.
He said: "While the Malaysia-India record is good, it is not good enough.We need to pay fresh attention to how and what we trade with each other.
"The dividends may be good, but it is not good enough that the productstraded between us are dominated by primary products such as crudepetroleum, palm oil, cereals, vegetables and fruits, meat and organicchemicals."
Over the last nine years, there has been a 500 percent increase inMalaysia-India trade - from a mere US$467 million in 1994 to US$3.2billion (US$1 = RM3.8) in 2003. And the figure is expected to rise beyondUS$4.5 billion this year.
Malaysia is also India's biggest trading partner among the 10 members ofthe Southeast Asian regional grouping, Asean.
Abdullah said despite record levels of bilateral trade, India's importsfrom Malaysia last year only accounted for 3.4 percent of its totalimports and Malaysia's imports from India only added up to 0.8 percent ofits total imports.
He said that one of the ways to boost bilateral trade was to promote crossborder investments between both countries, and, in this context, India wasan attractive location for Malaysian investors, potentially in themanufacturing and services sectors.
In addition, he said that Malaysian companies had pumped in more thanUS$450 million this year in sectors such as infrastructure, oil, power,telecommunications, tourism and human resource.
Meanwhile, he urged India to look at Malaysia as a gateway to the10-member Asean, which had emerged as a dynamic and competitive regionwith a combined gross domestic product (GDP) of US$686 billion in 2003 anda population of more than 540 million.
In his pitch to attract Indian companies to come to Malaysia and otherAsean countries, Abdullah said there would be ample trade and investmentopportunities as the East Asian community gathered pace.
"This will eventually constitute a single market of more than two billionpeople or one third of humankind. That is why it would make economic sensefor Indian companies to make Malaysia a manufacturing and exporting base,"he said.
Abdullah told the attentive audience that Malaysia is a country thathonours its contracts.
"That means foreign capital is safe in our country, repatriation isguaranteed and tax incentives are abundant. No one need have any doubtabout the integrity of our financial system, the soundness of our monetarypolicies or about the speedy implementation of growth-oriented policies,"he said.
Abdullah drove home the point that good governance applied universally inMalaysia just as it did in India, and outside investors and multinationalcompanies could take comfort in the fact that the Malaysian judiciary wasindependent and unassailable.
He also disclosed that he would be addressing a business conference inKuala Lumpur titled "India-An Emerging Giant" next month.
At a question and answer session later, Abdullah said that the input ofthe business community was important in ensuring that a free tradeagreement (FTA) between Malaysia and India is workable and beneficial toboth parties.
Asked which areas should be given priority for cooperation, he said theyincluded education, research and development, knowledge economy, ICT andbiotechnology.