Towards intensifying India-Malaysia Investment Partnership
for next decade:
India Roadshow 2024 -Charting roadmap for future collaboration in bilateral investments
A ‘bright spot of world’, an ‘unprecedented success story’, a ‘raging bull’, etc.- this is how the world’s leading industry captains, economists and policy-makers defined India at the recently concluded World Economic Forum at Davos 2024. The enthusiasm about India’s economic capabilities was not without reason, rather backed by solid growth credentials.
In last one decade, India has moved from 11th largest economy to the 5th largest & poised to be 3rd largest by 2027. India’s solar energy capacity has grown twenty six times in the same period. Since 2014, India has attracted over US$ 596 billion of Foreign direct investment (FDI) positioning itself as a preferred global investment destination.
Backed by robust digital infrastructure through the JAM trinity- i.e. bank accounts (financial inclusion), Aadhaar (unique identity) and mobile phones (digital access), India is breaking records year after year in digital transactions surpassing 100 billion last year. Today, there is not a single field of life and place in world which is not positively impacted by the rising New India.
Malaysia, an Enhanced Strategic Partner for India and a key collaborator for development and prosperity of the Global South, is an important partner in India’s ongoing growth trajectory. Bilateral investment linkages between the two countries have been strong and growing across an array of sectors. However, to forge an investment partnership for the next decade, Malaysia and India should foster stronger collaborations in key focus areas of Renewable Energy, Semiconductors & Electronics Manufacturing and Startups.
Towards this effect, an India Investment & Trade Promotion Roadshow 2024 is taking place on 20-21 February 2024 in Kuala Lumpur with a 20 member high powered delegation from India comprising senior officials and industry leaders led by H.E. Mr. Rajesh Kumar Singh, Vice Minister, Ministry of Commerce & Industry of India in town. The investment Roadshow, is being organised by Invest India, India’s National Investment Promotion and Facilitation Agency in collaboration with the High Commission of India in Malaysia, Malaysia-India Business Council, Federation of Malaysian Manufacturers and Malaysian Semiconductor Industry Associations; and with active engagement of Ministry of Investment, Trade & Industry (MITI) of Malaysia, Malaysian Investment Development Authority (MIDA), and Malaysian External Trade Development Corporation (MATRADE).
Today, India ranks as world’s 3rd largest energy consumer in the world. India’s primary energy demand is expected to double by 2045. In anticipation of future requirements, India has adopted a sustainable approach by prioritising the development of environmentally sustainable renewable energy sources. India ranks fourth in global renewable energy installed capacity of over 180 GW. India has set to itself the target of 500 GW of renewable energy capacity by 2030 and net Zero emission target by 2070.
India’s ongoing endeavour to ensure sustainable and affordable energy access to 1.4 billion people, opens up vast opportunities for Malaysian companies particularly in ramping India’s energy infrastructure and in key fields like solar rooftops, bio-fuels, Green Hydrogen, Waste management (Biogas sector), etc. Prime Minister Modi has recently launched a nation wide movement to embrace solar energy through his initiative to install Solar Rooftops in 10 million houses. India aims to achieve 20% blending target by 2025 and to set-up over 9000 ethanol blending outlets across India. With National Green Hydrogen Mission, India is striving towards becoming a hub for hydrogen production and export.
Given this, Renewable energy sector must figure prominently in India-Malaysia Investment mix. Malaysian companies are already realising the vast potential for investment collaboration in green energy field with India. Since 2019, through Gentari, Petronas’ engagement in India’s RE sector has steadily grown with Gentari’s acquisition of 30% stake in India’s Greenko owned AM Green Ammonia Holdings BV to produce five million tonnes of green ammonia per annum by 2030; and Gentari’s joining India’s ReNew Energy Global to collaborate on a 50:50 joint venture for 5 GW of renewable energy capacity. Gentari has also partnered with India’s Tata Motors and Gati on electrical mobility. Such models of collaborations need to be replicated and more and more Malaysian-Indian ventures in Green and renewable energy is the way forward.
Akin to the renewable energy sector, Electronics manufacturing sector and semiconductors is another key sector that holds vast potential for India Malaysia collaboration. In last 9 years since 2014, India has achieved significant milestones in this sector. With electronics production crossing 100 billion dollars in 2023 (30bn $ in 2014); presence of over 200 mobile manufacturing units (from 2 units in 2014), over 850 million broadband users (from 60 million in 2014), India has set itself ambitious plan to achieve USD 300 billion for electronics manufacturing by 2025-26. India’s domestic market for semiconductors is expected to grow to US$110 billion by 2030. With dedicated industrial parks for electronics and semiconductor manufacturing, global players in the semiconductor sector are keen to set up shop in India. To encourage investments, India has launched key initiatives like Production Linked Incentive Scheme (PLI) for Large-scale Electronics Manufacturing, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), etc.
Malaysia, with a strong E&E sector and 15% of global back-end semiconductor value chain, can emerge as a strong partner for India on technological collaboration, capacity building and skill development. Emphasis on electronics & semiconductors sector in Malaysia’s New Industrial Master Plan (NIMP) fits well with India’s initiatives in this sector. A recent example of possible collaboration is setting up of India office at Bengaluru by Malaysia’s Infinecs- Penang-based company that offers electronics design services.
The Start-up sector is the third key sector that must be a core focus area for enacting India-Malaysia partnership for next decade. Today India is the third-largest startup ecosystem in the world. From just 350 start-ups in 2014, India now boasts an armada of about 120,000 registered startups. India which is home to 1 out of 10 unicorns globally adds 4 start-ups every hour. While, India and Malaysia have been collaborating in this filed, its time to ramp this collaboration significantly. Steps in this direction are taking place with Startup India, India’s leading start-up promotion Agency, and Malaysia’s Cradle Fund now working together to set up India-Malaysia Startup Bridge. Malaysian companies and Khazanah are investing in India’s startups, For example recently Wow Momos, an Indian food chain company, secured 42 million USD investement from Khazanah. Similarly, Indian startup unicorns such as Oyo rooms, Pine Labs, Razorpay, Ninacart have also increasingly been expanding its market into Malaysia. In the India-ASEAN Startup Summit held in December 2023, 35 Indian startups and accelerators across sectors such edutech, health tech, deep-tech, ESG participated and forged fruitful collaborations with Malaysian investors, corporates and other stakeholders. With Malaysia Startup Ecosystem Roadmap (SUPER) 2021-2030 aimed at generating 5,000 startups by 2025, India and Malaysia can be a natural partners for collaboration in start-up sector.
Since the formation of the Unity Government in Malaysia led by Hon’ble Prime Minister of Malaysia, Dato’ Seri Anwar Ibrahim, both governments have worked intensively to strengthen India-Malaysia Enhanced Strategic Partnership and create a further rich environment for greater investment and trade promotion. Since December 2022, over 13 bilateral Ministerial and deputy Ministerial visits have taken place further cementing bilateral and economic ties.
The 6th India-Malaysia Joint Commission Meeting co-chaired by the two Foreign Ministers held in New Delhi in November 2023 has further resolved to undertake several new initiatives including the Malaysia India Digital Council, India-Malaysia Startup-Bridge, India Malaysia Annual Energy Dialogue etc. to drive the relationship forward. In this backdrop, the India Investment and Trade Promotion Roadshow on 20-21 February 2024 in Kuala Lumpur is apt and timely, and provides an important event for charting roadmap on collaboration for the next decade in key areas such as renewable energy, semiconductors and electronics manufacturing.
