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M’sia to be ‘major investor’ in India

March 27, 2013

By John Gilbert

KUALA LUMPUR: Malaysia is expected to become a significant investor in India in the next three to five years, with investors coming through their own projects and investments in India in the first phase.

Invest India managing director Anupam Srivastava said the agency is working with the Malaysian government and investment champions to put together internationally benchmarked information on sectors where Malaysia is internationally competitive to invest in various projects in India.

“There is the electronic and hardware sector, food segment such as cold chain warehousing and third party logistics where Malaysia is strong in and we are also looking at specialised construction players in Malaysia who involve small and large projects and process engineering type of works.

“When you look at the electronic space, construction and infrastructure, including roads and bridges, the net investment India is looking for the next five years is roughly in the order of US$400 billion (RM1.24 trillion), and out of this, between 60% to 70% already have active pursuit of investment from East Europe, some countries from South-East Asia and some big players from the Middle East,” Anupam told reporters at the conference and roundtable event entitled “India: The Road Ahead” here yesterday.

“Over the next five years, Malaysia will see their own operations and into partnerships coming into India and will scale up their manufacturing and productions in India,” he said.

Invest India is a joint-venture company between the Indian Ministry of Commerce and Industry, Federation of Indian Chambers of Commerce and Industry and various Indian state governments.

Anupam said the Malaysian sovereign wealth fund Khazanah Nasional Bhd can participate in funding of these types of activities because the rate of returns on investments in infrastructure in India was now averaging between 12% and 19%, which is “quite high” by international standards.

He said Malaysia and India, through various agencies in both countries, will put together information and a list of matching companies in potential sectors in India and hold events and other initiatives to connect these two parties together.

“Through this, we will have a very high probability of conversion of these into actual projects and once that happens, Invest India and other arms from the Indian government will work with the Malaysian side to fulfil and meet those requirements so that we can convert these interests into real projects on the ground,” he said.

Multiple entry visa

According to the Ministry of International Trade and Industry, bilateral trade between Malaysia and India last year reached US$13.3 billion, surpassing RM12.5 billion set in 2011.

The prime ministers of both countries have set the target to reach RM20 billion mark by 2015 when they met at the Asean Commemorative Summit in New Delhi last December.

On the investment side, a total of RM1.3 billion of Indian equity investments are in Malaysia to date, while Malaysian companies have invested extensively in industries such as oil refinery, telecommunications and electrical equipment, highway construction and many other infrastructure development projects.

Some of the prominent Malaysian companies in India are Sime Darby Bhd, Petroliam Nasional Bhd, UMW Holdings Bhd, Khazanah Nasional, IJM Corp Bhd, Scomi Engineering Bhd and Malaysia Airports Holdings Bhd.

At the same event, High Commissioner of India to Malaysia Vijay Gokhale (photo) said India is working towards a memorandum of understanding (MoU) between the two countries for movement of people between the countries for business purposes.

“The MoU will give access to a multiple entry visa to the people who are travelling for these reasons and I would also like to ask Malaysian corporates to invest in India in the field of infrastructure, hospitality and tourism,” he said.

The other two sectors that are also becoming important in India are the pharmaceutical and automotive component manufacturing for which India has become a hub, Vijay said.

This content is provided by FMT content partner The Malaysian Reserve.


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