The Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA) will come into effect on 1 July 2011. The free trade agreement addresses issues related to the liberalisation of trade in goods, trade in services, investments and economic cooperation. It is Malaysia’s fourth bilateral FTA after Japan, Pakistan and New Zealand.
The benefits provided by MICECA are in addition to those already made available under the ASEAN-India Trade in Goods Agreement (AITIG) which was implemented on 1 January 2010.
Under MICECA, Malaysia and India will progressively reduce or eliminate tariffs on an agreed list of industrial and agricultural products between 1 July 2011 and 31 December 2019. Malaysian exporters will enjoy free duty market access for rubber products, chemical products and electrical equipment from 1 July 2011. Imports from India into Malaysia will enjoy zero or lower duties for live animals and meat, textile materials and manufactures of metal beginning 1 July 2011.
For Trade in Services, MICECA offers opportunities for professionals from both countries to extend their services to each other’s market. MICECA also facilitates the temporary entry of business people including contractual service suppliers, independent professionals and business visitors, including potential investors.
Trade between Malaysia and India has been on an upward trend and totaled RM30 billion (US$9 billion) in 2010. From January to April this year, it amounted to RM12.1 billion (US$3.98 billion). It is expected that the implementation of this agreement will boost bilateral trade to RM46 billion (US$15 billion) by 2015.
MICECA also facilitates cross-border investments. Investment by Malaysian companies in India totals about RM1,059 million (US$310 million) to date. Of this, RM209 million (US $65 million) was invested in 2010. Major areas of investment include construction, financing, insurance real estate and business services.
MICECA creates an attractive operating environment for the business communities of both countries to increase bilateral trade and investment. The Malaysian business community is encouraged to take full advantage of the opportunities offered under this agreement.
The text of MICECA, with details of commitments on goods and services, is available on MITI’s website at www.miti.gov.my.
MITI Weekly Bulletin, Vol 149, 5 July 2011