Malaysia expects India's GST move to pave way for more investments

NEW DELHI: Malaysia, which fell short of its projected US$15 billion (RM66 billion) annual trade with India, is hoping the country's impending move to implement the Goods and Services Tax (GST) will pave the way for more trade and investment between both countries.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed (pix), who described the GST as very significant and the biggest economic reform in India since its independence, received the support of both the government and opposition parties.
"This will have tremendous impact on the Indian economy once it's implemented on July 1. The best thing is, even the opposition parties support the move to implement the GST because they know it will benefit the country in the longer run," he told reporters here today.
Mustapa said Prime Minister Datuk Seri Najib Abdul Razak's six-day visit to India was timely and would help Malaysia diversify its trade and not just rely on China, as claimed by some quarters.
Against the backdrop of India's projected annual Gross Domestic Product growth of 7.5% in the next four to five years and reforms in many economic sectors, Mustapa said it would further open up investment and trade opportunities in the country of 1.3 billion people.
"Our target is to attain US$15 billion trade by 2015, but we achieved only US$12 billion and dropped further to US$10.8 billion in 2016 due to the sluggish global economy, lower palm oil and petroleum prices," said Mustapa, who met Malaysian companies and Indian businesses in the financial city of Mumbai on Thursday.
Malaysian companies invested US$4.5 billion in India last year, with major investments coming from Khazanah Nasional-linked companies like SP Armada, Scomi and Sapura Energy mostly in the infrastructure, construction, oil and gas, healthcare and township development.
On the other hand, Indian firms invested US$1.5 billion in Malaysia including Reliance Industries' petrochemical oil and gas processing plant in Kuantan and polyester plant in Nilai.
Mustapa hoped Najib's visit would be able to attract more investments from India to Malaysia's pharmaceutical, information technology, manufacturing and education sectors.
On Monday, Najib, who is accompanied by 10 Cabinet ministers, will hold dialogue sessions with leaders and captains of industries from major business sectors in India. — Bernama