A "BRIGHT spot of world", an "unprecedented success story", a "raging bull", etc. - this is how the world's leading industry captains, economists and policymakers defined India at the recently concluded World Economic Forum at Davos 2024.
The enthusiasm about India's economic capabilities is not without reason, rather it is backed by solid growth credentials. In the last one decade, India has moved from being the 11th largest economy to the fifth largest and is poised to be the third largest by 2027.
India's solar energy capacity has grown 26 times in the same period. Since 2014, India has attracted over US$596 billion of foreign direct investment (FDI), positioning itself as a preferred global investment destination.
Backed by robust digital infrastructure through the JAM trinity - i.e. bank accounts (financial inclusion), Aadhaar (unique identity) and mobile phones (digital access), India is breaking records year after year in digital transactions which surpassed 100 billion last year.
Today, there is not a single field of life and place in the world which is not positively impacted by the rising New India.
Malaysia, an enhanced strategic partner for India and a key collaborator for development and prosperity of the Global South, is an important partner in India's ongoing growth trajectory.
Bilateral investment linkages between the two countries have been strong and are growing across an array of sectors.
However, to forge an investment partnership for the next decade, Malaysia and India should foster stronger collaborations in key focus areas of renewable energy, semiconductors and electronics manufacturing and start-ups.
Towards this vision, an India Investment & Trade Promotion Roadshow 2024 is taking place on Feb 20-21, 2024 in Kuala Lumpur with a 20-member high-powered delegation from India comprising senior officials and industry leaders led by Rajesh Kumar Singh, Vice-Minister, Ministry of Commerce & Industry of India.
The investment roadshow, is being organised by Invest India which is India's National Investment Promotion and Facilitation Agency, in collaboration with the High Commission of India in Malaysia, Malaysia-India Business Council, Federation of Malaysian Manufacturers and Malaysian Semiconductor Industry Associations and with active engagement of the Ministry of Investment, Trade & Industry (Miti) of Malaysia, Malaysian Investment Development Authority and the Malaysian External Trade Development Corporation.
Today, India ranks as the world's third largest energy consumer in the world. India's primary energy demand is expected to double by 2045.
In anticipation of future requirements, India has adopted a sustainable approach by prioritising the development of environmentally sustainable renewable energy sources. India ranks fourth in global renewable energy installed capacity of over 180 GW.
India has set itself the target of 500 GW of renewable energy capacity by 2030 and net zero emissions target by 2070.
India's ongoing endeavour to ensure sustainable and affordable energy access to 1.4 billion people, opens up vast opportunities for Malaysian companies particularly in ramping up India's energy infrastructure and in key fields like solar rooftops, bio-fuels, green hydrogen, waste management (biogas sector), etc.
Prime Minister Narendra Modi recently launched a nation-wide movement to embrace solar energy through his initiative to instal solar rooftops in 10 million houses. India aims to achieve 20 per cent blending target by 2025 and to set-up over 9,000 ethanol blending outlets across India.
With the National Green Hydrogen Mission, India is also striving towards becoming a hub for hydrogen production and export.
Given these initiatives, the renewable energy sector must figure prominently in the India-Malaysia investment mix. Malaysian companies are already realising the vast potential for investment collaboration in the green energy field with India.
Since 2019, through Gentari, Petronas' engagement in India's RE (Renewable Energy) sector has steadily grown with Gentari's acquisition of a 30 per cent stake in India's Greenko owned AM Green Ammonia Holdings BV to produce five million tonnes of green ammonia per annum by 2030. Gentari is also joining India's ReNew Energy Global initiative to collaborate on a 50:50 joint venture for 5 GW of renewable energy capacity.
Gentari has also partnered with India's Tata Motors and Gati on electrical mobility. Such models of collaborations need to be replicated and more and more Malaysian-Indian ventures in green and renewable energy is the way forward.
Akin to the renewable energy sector, the electronics manufacturing sector and semiconductors is another key sector that holds vast potential for India-Malaysia collaboration.
In the last nine years since 2014, India has achieved significant milestones in this sector.
With electronics production crossing US$100 billion last year (US$30 billion in 2014); the presence of over 200 mobile manufacturing units (from two units in 2014), over 850 million broadband users (from 60 million in 2014), India has set itself an ambitious plan to achieve US$300 billion for electronics manufacturing by 2025-26.
India's domestic market for semiconductors is expected to grow to US$110 billion by 2030.
With dedicated industrial parks for electronics and semiconductor manufacturing, global players in the semiconductor sector are keen to set up shop in India.
To encourage investments, India has launched key initiatives like Production Linked Incentive Scheme (PLI) for Large-scale Electronics Manufacturing, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), etc.
Malaysia, with a strong E&E sector and a 15 per cent of global back-end semiconductor value chain, can emerge as a strong partner for India on technological collaboration, capacity building and skills development. Emphasis on the electronics and semiconductors sector in Malaysia's New Industrial Master Plan fits well with India's initiatives in this sector.
A recent example of possible collaboration is the setting up of the India office at Bengaluru by Malaysia's Infinecs, a Penang-based company that offers electronics design services.
The start-up sector is the third key sector that must be a core focus area for enacting India-Malaysia partnership for the next decade. Today, India is the third-largest start-up ecosystem in the world. From just 350 start-ups in 2014, India now boasts an armada of about 120,000 registered start-ups. India, which is home to one out of 10 unicorns globally, adds four start-ups every hour.
While India and Malaysia have been collaborating in this field, it is time to ramp up this collaboration significantly. Steps in this direction are taking place with Start-up India, India's leading start-up promotion Agency, and Malaysia's Cradle Fund now working together to set up the India-Malaysia Start-up Bridge.
Malaysian companies and Khazanah are investing in India's start-ups too. For example, recently Wow Momos, an Indian food chain company, secured US$42 million in investment from Khazanah.
Similarly, Indian start-up unicorns such as Oyo rooms, Pine Labs, Razorpay, Ninacart have also increasingly been expanding its market into Malaysia.
In the India-Asean Start-up Summit held in December 2023, 35 Indian start-ups and accelerators across sectors such edutech, health tech, deep-tech and ESG participated and forged fruitful collaborations with Malaysian investors, corporates and other stakeholders.
With Malaysia Start-up Ecosystem Roadmap (SUPER) 2021-2030 aimed at generating 5,000 start-ups by 2025, India and Malaysia can be natural partners for collaboration in the start-up sector.
Since the formation of the unity government in Malaysia led by Prime Minister Datuk Seri Anwar Ibrahim, both governments have worked intensively to strengthen India-Malaysia Enhanced Strategic Partnership and create a further rich environment for greater investment and trade promotion.
Since December 2022, over 13 bilateral ministerial and deputy ministerial visits have taken place, further cementing bilateral and economic ties.
The 6th India-Malaysia Joint Commission Meeting, co-chaired by the two foreign ministers held in New Delhi in November last year, has further resolved to undertake several new initiatives including the Malaysia India Digital Council, India-Malaysia Start-up-Bridge, India Malaysia Annual Energy Dialogue, etc. to drive the relationship forward.
In this backdrop, the India Investment and Trade Promotion Roadshow today and tomorrow in Kuala Lumpur is apt and timely, and provides an important event for charting the roadmap on collaboration for the next decade in key areas such as renewable energy, semiconductors and electronics manufacturing.
The writer is High Commissioner of India to Malaysia
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times
