Back on track: On Malaysia–India ties

UPSC Syllabus: Gs Paper 2- International Relations

Introduction

India–Malaysia relations entered a phase of correction after diplomatic unease in 2025. Prime Minister Narendra Modi’s February 2026 visit to Kuala Lumpur signalled intent to restore trust and momentum. The visit focused on repairing political confidence, strengthening economic cooperation, and reaffirming shared positions on terrorism, the Indo-Pacific, and multilateral reforms, while carefully avoiding public discussion of contentious issues.

Historical and Institutional Foundations of the Relationship

1. Civilisational links: India and Malaysia share civilisational connections spanning over two millennia, shaped by Indian Ocean trade, religion, language, and cultural exchange. Sanskrit influences and Hindu-Buddhist traditions are visible in Malaysia’s historical evolution.
2. Diplomatic continuity: Modern diplomatic relations were established in 1957, soon after India’s independence, and have seen sustained political engagement. The relationship was elevated to a Comprehensive Strategic Partnership in August 2024.
3. Institutional framework: Regular Foreign Office Consultations, Joint Commission Meetings, and parliamentary exchanges provide structure and continuity to bilateral relations.

Sources of Friction in India–Malaysia Relations

1. Security-related divergence in 2025: While Malaysia condemned the Pahalgam terror attacks, Prime Minister Anwar Ibrahim’s call for enquiry, de-escalation, and mediation on India–Pakistan issues caused discomfort in New Delhi.
2. Pakistan outreach concerns: Malaysia’s hosting of Pakistan Prime Minister Shahbaz Sharif in October 2025 added to Indian unease during a sensitive period.
3. Trade and ASEAN-related strain: India’s absence from the ASEAN summit in 2025 weakened momentum on reviewing the ASEAN–India Trade in Goods Agreement. Critical remarks by India’s Commerce Minister on the agreement and ASEAN partners further affected goodwill.

Key Outcomes and Agreements of the 2026 Visit

1. Repairing Trust Through Engagement
   1. Diplomatic reset: India chose to set aside past irritants to rebuild trust. Malaysia became India’s first foreign destination in 2026, signalling priority and reassurance.
   2. Convergence on terrorism: Both sides unequivocally condemned terrorism, including cross-border terrorism. They agreed on zero tolerance, intelligence sharing, and coordination at the United Nations and the Financial Action Task Force.
   3. Signing of multiple agreements: A total of 11 agreements and documents were concluded, covering trade, defence, energy, digital cooperation, and advanced manufacturing.
2. New and Emerging Areas of Cooperation
   1. Semiconductor cooperation: A framework agreement strengthened collaboration in semiconductors, building on links between IIT Madras Global and Malaysia’s Advanced Semiconductor Academy, with focus on workforce and supply chains.
   2. Trade, investment, and industry links: Both sides committed to expanding trade and investment in infrastructure, advanced manufacturing, healthcare, and green technologies. The CEO Forum highlighted new business opportunities.
   3. Local currency trade settlement: India and Malaysia promoted use of the Indian Rupee and Malaysian Ringgit for bilateral trade, aiming to reduce transaction costs and deepen financial cooperation.
   4. Energy and sustainability: Cooperation expanded in renewable energy and green hydrogen, with Malaysian firms already active in India’s clean energy landscape.
3. Defence, Security, and Indo-Pacific Cooperation
   1. Strengthening defence ties: Regular military exercises, defence exchanges, and cooperation through the Malaysia–India Defence Cooperation Committee were reaffirmed.
   2. Counter-terrorism and maritime security: Both sides agreed to deepen intelligence sharing, counter-radicalisation efforts, and maritime cooperation in the Indo-Pacific.
   3. ASEAN centrality and Indo-Pacific vision: India reiterated support for ASEAN centrality and committed to a free, open, and stable Indo-Pacific, aligning with Malaysia’s regional outlook.
4. Multilateral and Regional Dimensions
   1. United Nations and institutional reform: Malaysia extended support for India’s permanent membership in a reformed UNSC. Both sides backed reforms to make global institutions more representative.
   2. BRICS engagement: India noted Malaysia’s aspiration to join BRICS and welcomed its role as a partner country, while maintaining a calibrated position.
   3. ASEAN and regional balance: The visit reassured Southeast Asia of India’s continued engagement even as New Delhi advances trade agreements with Europe and the United States.
5. People Connect
   1. Diaspora engagement:Meetings with Indian-origin political leaders highlighted their role in strengthening bilateral ties.
   2. Education and mobility: Both sides promoted cooperation in education, skills, tourism, and people-to-people exchanges.
   3. Institutional presence: India announced the establishment of an Indian Consulate General in Malaysia to support growing engagement.

Significance for India’s Foreign Policy

1. Act East Policy reaffirmed: The visit underlined India’s commitment to Southeast Asia despite earlier setbacks and broader global trade shifts.
2. Pragmatic diplomacy: By avoiding public disputes and focusing on shared interests, India demonstrated flexibility and strategic patience.
3. Regional stability focus: Emphasis on terrorism, maritime security, and multilateral cooperation aligned India’s regional goals with broader Indo-Pacific stability.

Conclusion

The visit marked a careful course correction rather than a full reset. By restoring political trust, expanding economic cooperation, and aligning on security and multilateral issues, India and Malaysia placed their partnership back on a stable track. Sustained follow-up on trade reviews, semiconductor cooperation, and ASEAN engagement will determine whether this renewed momentum translates into long-term strategic convergence.

Question for practice:

Evaluate the significance of Prime Minister Narendra Modi’s February 2026 visit to Malaysia in resetting bilateral ties and advancing India’s strategic interests in Southeast Asia.

Source: The Hindu