India and Malaysia will announce a free trade pact, which had been in the works for close to three years, during Prime Minister Manmohan Singh’s visit here later this month.
However, the Comprehensive Economic Cooperation Agreement (CECA), may not be signed during Singh’s visit to Malaysia, slated from October 26—28, officials here said.
The pact, which will take effect next year, aims to enhance the USD 7.1 billion trade between the two countries.
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“Everything has been agreed,” Malaysia’s International Trade & Industry Minister Mustapa Mohamed said here, noting that India was a big and fast growing market for the country.
Meanwhile, a senior official said the final dates for signing of the CECA will be announced later.
The two countries have conducted seven rounds of discussions on the CECA since February 2008, and the deal will be ready for implementation on July 1, 2011, Mustapa said.
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The CECA covers services, investments, customs and trade.
India has exempted 1,225 items from tariff reductions under the Malaysian pact, compared with 1,298 under its Asean deal while Malaysia has exempted 838 items, compared with 898 under the earlier Asean agreement.
The CECA will give Malaysia concessions for export of palm oil and related products.
In 2009, the negotiations were put on hold as both sides wanted to focus on completing the Asean—India Trade in Goods Agreement. An area of key concern to both sides is movement of professionals, especially in the financial and hospitality sectors.
Malaysia is also interested in India’s progressive liberalisation in the area of goods and services, particularly in construction and infrastructure development, real estate and property and tourism.
India is an important trading partner for Malaysia and bilateral trade between the two has been on the rise.
In 2009, India was Malaysia’s 12th largest trading partner.
Trade with India amounted to USD 7.1 billion, with exports valued at USD 4.8 billion and imports at USD 2.2 billion.