| Abstract | India established diplomatic relations with the Federation of Malaya (the
predecessor state of Malaysia) in 1957. Since then, India and Malaysia have developed
close political, economic, and socio cultural relations. Malaysia hosts the third-largest
Person of Indian Origin (PIO) community in the world, following the US and UAE. As
of 2022, which marked 65 years of diplomatic ties, there is a growing engagement in all
aspects of the bilateral relationship, particularly in the economic sphere. Malaysia is
India’s 13th largest trading partner, while India ranks among the top ten trading partners
globally. Additionally, Malaysia has emerged as the third-largest trading partner for India
within the ASEAN region. Bilateral trade reached USD 20.02 billion in 2023-24,
comprising USD 7.27 billion in exports from India and USD 12.75 billion in imports.
This study explores the evolving economic partnership between India and Malaysia in
the 21st century, focusing on the dynamics of trade and investment. Utilizing secondary
data, the paper examines the growth trajectory, key sectors, challenges, and future
prospects of bilateral economic relations. The analysis underscores the significance of
strategic collaborations, policy initiatives, and the role of digital infrastructure in
fostering deeper economic integration between the two nations.
Keywords—India-Malaysia Relations, Bilateral Trade, Foreign Direct Investment,
Renewable Energy, Digital Economy, ASEAN-India Business Summit.
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