India and Malaysia Ink 11 Pacts to Strengthen Defense and Semiconductor Ties

Prime Minister Narendra Modi visited Malaysia on 7-8 February 2026 at the invitation of Prime Minister Anwar Ibrahim. The visit came after both countries elevated ties to a Comprehensive Strategic Partnership in August 2024. 

India and Malaysia have maintained diplomatic relations since 1957. The relationship has developed around trade, defence, education and cultural exchanges, with a sizeable Indian-origin community in Malaysia forming a key link between the two countries. 

Eleven Agreements Signed 

During the visit, the two sides signed or exchanged 11 agreements and cooperation documents. These covered areas such as semiconductors, disaster management, national security, vocational education, healthcare, social security, and audio-visual co-production. 

Both governments also reviewed ongoing cooperation in renewable energy, advanced manufacturing, artificial intelligence, fintech, and green technologies. Defence ties were discussed, including the Harimau Shakti joint military exercise held in Rajasthan in December 2025. 

Trade Figures and Local Currency Settlement 

Bilateral trade between India and Malaysia stood at about $18.6 billion last year. The 2 sides said they would work to expand trade and investment through existing agreements, including the Malaysia-India Comprehensive Economic Cooperation Agreement and the review of the ASEAN-India trade pact. 

The Reserve Bank of India and Bank Negara Malaysia are promoting settlement of trade in local currencies. Businesses have been encouraged to invoice and settle transactions in Indian rupees and Malaysian ringgit. 

Payment linkages between NPCI International and Malaysia’s PayNet were also announced. These are meant to support cross-border payments for tourists, students, and small businesses. 

Cooperation in Digital, Energy and Food Sectors 

The 2 countries formalised the Malaysia–India Digital Council to support work in fintech, cyber security and digital infrastructure. They also discussed cooperation in semiconductors and large-scale solar projects. 

Malaysia reiterated its commitment to supply palm oil, while both sides agreed to work on value-added products and stable agricultural supply chains. 

Read More: India Will Continue to Attract Overseas Investments Due to Strong Growth: RBI Governor! 

Conclusion 

The visit resulted in agreements across trade, technology, defence and social sectors, alongside steps to expand local currency trade settlement and payment links. 

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