Malaysia is one of the most open economies in the world with a trade to GDP ratio averaging over 130% since 2010. After the Asian financial crisis of 1997-1998, Malaysia’s economy has been on an upward trajectory, averaging growth of 5.4% since 2010, and is expected to achieve its transition from an upper middle-income economy to a high-income economy by 2024.
India’s engineering exports to Malaysia for April-February 2021-22 recorded US$ 1.35 billion. India’s major engineering exports to Malaysia include Ships, Boats and Floating Structures, Iron and steel, Aluminium and products made of Aluminium, Products of Iron and Steel, Industrial Machinery for dairy, agriculture, food processing, textiles, paper, chemicals, etc. India’s exports of Tools & Machinery hardware, Air Cooler, Air Compressor, Air Dryer & Ventilation, Cutting tools to Malaysia for April-February 2021-22 stood at US$ 53.3 million, which is more than 46% growth compared to export during April-February 2020-21.
The Indian Engineering sector has witnessed a remarkable growth over the last few years driven by increased investments in infrastructure and industrial production. The engineering sector, being closely associated with the manufacturing and infrastructure sectors, is of strategic importance to India’s economy.
As per the latest WTO World Trade Report, 2021, the pandemic resulted in reducing the global trade by almost 9.6 percent and global growth by 3.3 percent in 2020. However, contrary to the other economic factors, the trading system globally has proved itself more resilient than what was expected at the outset of the crisis. There has been an overall increase in global demand and exports across the globe, which in turn has also accelerated the growth in India’s engineering exports. Thus post pandemic the revival in global and ASEAN nations is expected to boost India’s engineering exports further. India having a FTA with the ASEAN will definitely have an added advantage in its exports to Malaysia over its other counterparts.