High Commission of India
Kuala Lumpur
(Commercial Wing)
No.KUA/C/201/1/09 15 January 2010
Economic and Commercial Report (ECR) - December 2009
PART – I
(i) New Currency Declaration Requirement at All Entry and Exit Points of Malaysia
As per a press statement by Bank Negara Malaysia (the country’s central bank) on 23.12.2009, in line with the global effort to combat money laundering and terrorism financing, effective 1 January 2010, travellers entering or leaving Malaysia with cash and/or negotiable bearer instruments (e.g. traveller's cheques, bearer cheques) exceeding an amount equivalent to USD10,000 must make a declaration in form Customs No. 22. The forms will be made available at counters located before the Customs Checkpoints at all entry and exit points of Malaysia.
The press statement further says that this is a requirement under section 23 of the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA) and is in line with the Special Recommendation IX by the Financial Action Task Force which requires countries to have measures in place to detect the physical cross border transportation of cash and negotiable bearer instruments. Travellers could be fined up to RM1 million and/or face imprisonment not exceeding a term of one year if they fail to declare or make a false declaration.
Bank Negara Malaysia has given following contact points for more information:
Royal Malaysian Customs Department
Public Relations Division
Royal Malaysian Customs Department Headquarters
Tel: 1-800-88-8855/+6 03-8882 4803/+6 03-8882 2929 or
E-mail: /
Website: http://www.customs.gov.my
Bank Negara Malaysia
BNMTELELINK (Customer Service Call Centre)
Tel: 1-300-88-5465 or
E-mail:
Website: http://www.bnm.gov.my
(i-a) Central Bank of Malaysia Act 2009 Comes into Force
o In a press statement, Bank Negara Malaysia announced coming into force of the Central Bank of Malaysia Act 2009 (The Act) with effect from 25.11.2009. With this, the Central Bank of Malaysia Act 1958 is repealed. The Act will enable Bank Negara Malaysia to more effectively manage emerging risks and challenges in performing its role and responsibilities as the nation's central bank. The Act provides greater clarity on the Central Bank's mandate and vests it with the necessary powers and instruments to achieve this mandate. Incorporated in the Act is a more robust governance framework that provides for a high degree of accountability and transparency. The principal objects of Bank Negara Malaysia are to promote monetary stability and financial stability conducive to the sustainable growth of the Malaysian economy. The primary objective of monetary policy is to maintain price stability while giving due regard to developments in the economy. The Act stipulates that monetary policy is to be autonomously formulated by the Monetary Policy Committee (MPC) and effectively implemented by Bank Negara Malaysia. Adequate safeguards have been incorporated in the Act with respect to the membership of the MPC, the decision making framework and requirements for transparency, disclosure and accountability. The new Act is available on the Bank Negara’s (Malaysia’s central bank) website www.bnm.gov.my
ii) Rate of Inflation
The Consumer Price Index (CPI) stabilized in November 2009, registering a
marginal decline of 0.1% on an annual basis (October: -1.6%). As in Oct 2009, the improvement in headline inflation was largely driven by the lapse in the adjustment to retail fuel prices last year. In addition, higher inflation was registered in the miscellaneous goods and services category at 4.8% (October: 3.2%), caused by higher prices for jewellery, rings and precious stones.
iii) Total trade in USD, trade balance and its growth to 10 major countries
During the Jan-Oct 09, total exports reduced by 20.7% to RM 448.6 billion (approx. US $ 102.41 billion) while total imports contracted by 21.4% to RM 351.2 billion (approx. US $ 79.81 billion) as compared with the same reference period of 2008.
However, Malaysia’s external trade balance registered a surplus of RM 97.4 billion ( - 18.1%) as against RM 118.8 billion during the corresponding period of 2008.
Top ten export destinations during Jan-Oct’09 were Singapore, China, US, Japan, Thailand, Hong Kong, South Korea, Australia, Netherlands and Indonesia. Exports to these countries accounted for around 71% of Malaysia’s total exports.
Top ten import sources during Jan-Oct’ 09 were China, Japan, US, Singapore, Thailand, Indonesia, South Korea, Germany, Taiwan and Hong Kong. Imports from these countries amounted to around 75% of Malaysia’s total imports.
iv) The five principal export commodities
1. Electrical & Electronic products
2. Palm Oil & Palm Oil based Products
3. Liquefied Natural Gas [LNG]
4. Crude Petroleum
5. Timber & Timber based Products
v) The principal five import items (India’s rank in each of these categories above including market share if we figure in the top five)
1. Machinery & Transport Equipment
2. Manufactured Goods
3. Chemical and chemical products
4. Mineral Fuels, Lubricants etc.
5. Food
vi) India-Malaysia bilateral trade by top 10 commodities
Bilateral total trade between India and Malaysia declined by 28% to RM 20,632.67 million (USD 6068.42 million) in Jan-Oct. 2009 as compared with RM 30,009.71 million (USD 8429.68 million) in the same period of 2008. Malaysia’s exports to India were at RM 13,969.49 million (USD 4108.67 million) and imports from India were valued at RM 6663.18 million (USD 1959.75 million) in Jan-Oct. 2009.
Please see Annexes-I & II for commodity-wise details.
vii) Top five items of export from India to Malaysia and the top five items of import from Malaysia into India
a) Export from India to Malaysia
1. Frozen Bovine meat and fish
2. Chemicals and chemical products
3. Vegetables & Oilseeds
4. Maize, Spices, Groundnut, Cashew nut
5. Machinery, Appliances & Parts
b) Import from Malaysia to India
1. Palm Oil, Copra Palm kernel
2. Animal & Vegetable Fats
3. Mineral Fuels
4 Cocoa powder/butter fat
5. Electrical & Electronic Goods
(viii) India’s Investment interests
Paper and Pulp Industry, Plantation, Palm oil and derivatives, Bio-diesel, Biotechnology, IT & IT-enabled services, human resource development, higher education, construction, pharmaceuticals, manufacturing, financial services, incl. capital market, banking, healthcare, tourism, agriculture, SME Development, energy, transport, chemical and chemical products, wood and wood products, etc.
ix) Major trading agreements proposed/finalized and their impact on trade.
The recently signed ASEAN-India FTA would come into effect from 1.1.2010 and in all probability India-Malaysia bilateral trade would touch the higher marks.
x) Executive Summary (Highlighting Action Points)
1. Trade and Investment Missions to Malaysia to promote Indian exports, with the objective of narrowing the bilateral trade balance tilted in Malaysia’s favour as of now.
2. Conduct Market Surveys to identify ‘focus products’ with export potential under Market Access Initiative (MAI)
3. Organising Product-specific Exhibitions, Fairs, Buyer Seller Meets (BSM), etc. by the Indian trade promotion agencies.
4. Ensure higher participation of Indian companies in Malaysian Exhibitions and Fairs.
5. Malaysia has excellent infrastructure, abundant land, energy resources and water which are key elements for any business development. Indian companies can benefit by investing in Malaysia, particularly in the recently announced development corridors.
PART – II
Bilateral Visits & Trade Policy/Promotion Measures
o Malaysian Minister of Works Dato Shaziman bin Abu Mansor visited India from 14-15 December 2009 at the invitation of Mr. Kamal Nath, Hon’ble Minister for Road Transport & Highways. The visit focused on discussing the possibility of a G2G arrangement for development of National Highways in India.
o Malaysia’s Minister of Plantation Industries and Commodities Tan Sri Bernard Giluk Dompok visited India and met Shri Anand Sharma, Hon’ble Minister of Commerce & Industry at New Delhi on 15 December 2009. Since palm oil is a major item of Malaysia’s export to India, both sides seek to strengthen their collaboration in this sector including plantation, refining etc.
o Confederation of Indian Industry brought 24 Indian companies to set up “Enterprise India Pavilion” at the 8th Malaysia International Trade & Consumer Fair popularly called “Expo Cintai”, held at MIECC, Mines Resort City, Malaysia during 2-6 December 2009. The Trade Fair was organized by the Kuala Lumpur Chinese Chamber of Commerce & Industry. Indian companies showcased handicrafts, handlooms, cosmetics and garments during the event.
o 5 Malaysian businesspersons, three from M/s Unimatex Sdn Bhd and one each from M/s Hextar Chemicals Sdn Bhd and M/s NG Bengtee Sdn Bhd visited Ahmedabad at the invitation of CHEMEXCIL, Mumbai for Buyer-Seller Meet from 13-14 Dec. 09.
o A 4-member delegation from the Rubber Industry Smallholders Development Authority (RISDA), Kuala Lumpur visited Kerala from 13-17 December 2009 to meet officials of the Rubber Board, India. The delegation was led byMr. Omar bin Paimin, Director (Transfer of Technology and Ext. Division), RISDA, Malaysia. The propose of their visit was to exchange ideas and experiences in developing smallholders rubber processing centres, rubber cooperative, marketing of smallholders rubber products, cottage industry etc.
Other Bilateral/Multilateral Economic Matters (not involving India)
o ASEAN, China, Japan, South Korea and the Monetary Authority of Hong Kong (total 14) signed a plan to set up a US $ 120 billion emergency fund known as the “Chiang Mai Initiative Multilateralisation” – Asia’s first move to devise a safety net to shield itself from a financial crisis. The fund is likely to take effect from March 2010. China and Japan are the two largest contributors to the fund, each committing US $ 38.4 billion or 32% followed by South Korea at US $ 19.2 billion or 16%. Malaysia, Indonesia, Thailand and Singapore are equally committed to US $ 4.77 billion or 3.97%. The agreement aims to address difficulties in balance of payments and short term liquidity.
PART – III : Miscellaneous
o The international reserves of Bank Negara Malaysia amounted to RM331.3 billion (equivalent to USD96.7 billion) as at 31 December 2009.
o From 1 November to 29 December 2009, the Ringgit depreciated marginally by 0.9% against the U.S. dollar. The Ringgit appreciated against the Pound Sterling (2.7%) and the Euro (2.6%), but depreciated against the Japanese Yen (-0.4%).
o At the Monetary Policy Committee (MPC) meeting on 24.11.2009, Bank Negara Malaysia decided to leave the Overnight Policy Rate (OPR) unchanged at 2.00 percent.
A list of local trade enquiries received in December 2009 is attached as Annex.-III.
Annex I
Malaysia's Exports Jan - Oct 2009RM Mil / US$ Million
Commodity / Malaysia's / Malaysia's / Export to / Malaysia
Global / Export to India / India as % of / Export to India
global exports
Food / 12999.06 / 89.10 / 0.69% / 26.15
Bev & tobacco / 2062.00 / 15.72 / 0.76% / 4.61
Crude materials / 10441.91 / 1066.50 / 10.21% / 312.99
Mineral Fuels / 65298.63 / 4326.89 / 6.63% / 1269.81
Animal & Veg. Oil / 35847.00 / 2380.27 / 6.64% / 698.54
Chemicals / 27214.51 / 1615.35 / 5.94% / 474.06
Mfg. Goods / 41025.06 / 988.32 / 2.41% / 290.04
Mach & Trans / 207285.69 / 3034.11 / 1.46% / 890.42
MISC Mfd Articles / 42697.72 / 409.16 / 0.96% / 120.08
MISC Trans NES / 3709.02 / 44.09 / 1.19% / 12.94
Total: / 448580.59 / 13969.50 / 3.11% / 4099.63
Malaysia's Imports Jan - Oct 2009
RM Mil / US$ Million
Commodity / Malaysia's / Malaysia's / Import from / Malaysia
Global / Import from India / India as % of / Import from India
global imports
Food / 22231.15 / 1870.04 / 8.41% / 548.80
Bev & tobacco / 1671.34 / 73.47 / 4.40% / 21.56
Crude materials / 11469.40 / 249.91 / 2.18% / 73.34
Mineral Fuels / 29042.90 / 640.67 / 2.21% / 188.02
Animal & Veg. Oil / 3967.25 / 75.66 / 1.91% / 22.20
Chemicals / 32324.36 / 1211.84 / 3.75% / 355.64
Mfg. Goods / 43177.13 / 1512.04 / 3.50% / 443.74
Mach & Trans / 177944.06 / 824.96 / 0.46% / 242.10
MISC Mfd Articles / 20885.22 / 162.19 / 0.78% / 47.60
MISC Trans NES / 8490.35 / 42.41 / 0.50% / 12.45
Total: / 351203.15 / 6663.19 / 1.90% / 1955.45
* Miscellaneous Transactions Not elsewhere specified
US$1 = RM3.4075
Annex II
Malaysia’s Exports Oct 2009RM Mil / US$ Million
Commodity / Malaysia’s / Malaysia’s / Export to / Malaysia
Global / Export to India / India as % of / Export to India
global exports
Food / 1449.70 / 16.68 / 1.15% / 4.90
Bev & tobacco / 209.12 / 1.88 / 0.90% / 0.55
Crude materials / 1391.32 / 105.33 / 7.57% / 30.91
Mineral Fuels / 8117.89 / 444.53 / 5.48% / 130.46
Animal & Veg. Oil / 3963.23 / 299.68 / 7.56% / 87.95
Chemicals / 3148.75 / 121.75 / 3.87% / 35.73
Mfg. Goods / 4541.38 / 96.87 / 2.13% / 28.43
Mach & Trans / 25939.18 / 241.19 / 0.93% / 70.78
MISC Mfd Articles / 5017.24 / 55.97 / 1.12% / 16.42
MISC Trans NES / 459.51 / 4.77 / 1.04% / 1.40
Total: / 54237.33 / 1388.65 / 2.56% / 407.53
Malaysia’s Imports Oct 2009
RM Mil / US$ Million
Commodity / Malaysia’s / Malaysia’s / Import from / Malaysia
Global / import from India / India as % of / Import from India
global imports
Food / 2400.82 / 212.81 / 8.86% / 62.45
Bev & tobacco / 148.82 / 2.54 / 1.70% / 0.74
Crude materials / 1426.86 / 31.52 / 2.21% / 9.25
Mineral Fuels / 4660.49 / 199.34 / 4.28% / 58.50
Animal & Veg. Oil / 486.28 / 7.85 / 1.62% / 2.31
Chemicals / 3671.40 / 108.34 / 2.95% / 31.80
Mfg. Goods / 5133.50 / 145.39 / 2.83% / 42.67
Mach & Trans / 21523.57 / 86.80 / 0.40% / 25.47
MISC Mfd Articles / 2528.08 / 17.30 / 0.68% / 5.08
MISC Trans NES / 784.92 / 3.86 / 0.49% / 1.13
Total: / 42764.73 / 815.75 / 1.91% / 239.40
* Miscellaneous Transactions Not elsewhere specified
US$1 = RM3.4075
Annex III
LOCAL TRADE QUERIES FROM- 01- 12-09 TO 31-12-09)
Sl. No. / CONTACT / AREA OF INTEREST1. / Mr. James Lee
Koxler Equipment Sdn Bhd
PT1, 18th Mile,
Kg Pulau Meranti,
Jalan Puchong,
47100 Puchong,
Selangor.
Tel:+603 8060 0273
Fax: +603 8060 0275
H/P: +6016 2188128
Email: / REFRIGERATORS
2. / Mr. Fam Lian Fatt
Formosa Shyen Horng Metal Sdn Bhd
Lot 2033, Jalan Perindustrian Mahkota 7, Taman Perindustrian Mahkota,
43700 Beranang,
Selangor.
Tel: +603 8724 4662
Fax: +603 8724 4661
E-mail: / INVESTMENT IN INDIA