India and Malaysia are reviewing their trade pact due to the significant increase in bilateral trade deficit over the years. Trade imbalance means what — India buys more stuff from Malaysia than sells to them. That $2.6 billion deficit in 2011 ballooned to an estimated projected FY24 deficit of $5.5 billion. This has raised concerns of trade balance between the two nations.
A brief about India — Malaysia Trade Agreement
- 2011: India-Malaysia Comprehensive Economic Cooperation Agreement (CECA) SIGNED to boost trade relations and economic cooperation.
- People related areas offering commerce and trade movement are also covered under this agreement.
- India-Malaysia- India is at 10 th Place & Malaysia is at 14th place as trading partners
- The deal is one cost containment strategy to counter Chinese influence in the region.
Increasing Trade Deficit
- Malaysia is a net exporter to India rather than importer, largely in commodities like vegetable oils.
'Rules of Origin'
- TAKEAWAYS• India says 'rules of origin' key to link its products with global supply chains, tilt trade balance.
Non-Tariff Barriers
- For competitiveness of exports, Malaysia is identifying Non-tariff barriers such as strict sanitary and phytosanitary standards.
Consultation Plans
- Responding to a question on the Prime Minister's comments, the MEA said the Indian government will be discussing issues with stakeholder industries before any decision is taken.
- The revision of the FTA may provide fresh scope for Indian exports, but analysts caution against expecting a big cut in India's imports of critical products.
Month: Current Affairs - September 13, 2024
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