Malaysian trade minister Mustapa Mohammad has predicted that with the signing of the proposed trade pacts between India and Malaysia, Indian investments in the latter country are expected to rise. The minister also said that bilateral trade between the two countries would grow by 20% in 2010 on the back of the Asean-India free trade agreement (FTA) which has already showed an improvement in two-way trade by 11.9% from January to May, 2010.

This development is of immense importance to SMEs who are planning to expand their footprint into Malaysia. Increased trade between SMEs on both sides can help the two countries achieve their targeted bilateral trade of US$15 billion by 2015.

Incidentally, the two countries are also likely to sign the Comprehensive Economic Cooperation Agreement (CECA) later this year. As per the outcome of a recent visit of a Confederation of Indian Industry (CII) CEOs delegation to Malaysia, the CII had revealed that the agreement would include trade and investments in sectors such as financial services, telecommunications, IT and biotechnology. As these sectors have a fair presence of SMEs, the prospective trade and investments augur well for small Indian firms in these sectors.