WT/COMTD/RTA/5/1  
WT/REG329/1  
9 July 2013  
(13-3630)  Page: 1/44  
Committee on Trade and Development 
Dedicated Session on Regi onal Trade Agreements 
Committee on Regional Trade Agreements   
 
  
FACTUAL PRESENTATION 
FREE TRADE AGREEMENT BETW EEN INDIA AND MALAYSIA 
(GOODS AND SERVICES) 
 
Report by the Secretariat 
 
This report, prepared for the considerat ion of the Free Trade Agreement between 
India and Malaysia has been drawn up by the WTO Secretariat on its own responsibility and in full consultation with the Parties. The report has been drawn up 
in accordance with the rules and procedures contained in the Decision for a 
Transparency Mechanism for Regional Trade Agreements (WT/L/671). 
Any technical questions arising from this report may be addressed to 
Mr. Peter Milthorp (tel: +41 22 739 5016). Any statistical questions arising from this 
report may be addressed to Ms. Alejandra Barajas (tel: +41 22 739 6425). 
 WT/COMTD/RTA/5/1 
WT/REG329/1 
 
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  TABLE OF CONTENTS 
 
Page 
1   TRADE ENVIRONMENT ................................................................................................. 4  
1.1   Merchand ise trade ..................................................................................................... 4  
1.2   Trade in servic es and inve stment ................................................................................. 6  
2   CHARACTERISTIC ELEMEN TS OF THE AG REEMENT ...................................................... 7  
2.1   Background  Information ............................................................................................. 7  
3   PROVISIONS ON TRADE IN GOODS ............................................................................. 8  
3.1   Import duties and charges, and quantitative restrictions ................................................. 8  
3.1.1   General provisions .................................................................................................. 8  
3.1.2   Liberalization of  trade and ta riff lines ......................................................................... 9  
3.1.3   Liberali zation schedule............................................................................................ 10 
3.1.3.1   India ............................................................................................................... .. 10 
3.1.3.2   Malaysia ............................................................................................................  12 
3.1.4   Tariff rate quotas ................................................................................................... 15 
3.2   Rules of origin .......................................................................................................... 15 
3.3   Export duties and charges,  and quantitative  restrictions ................................................. 16 
3.4   Regulatory provisions on trade in goods ....................................................................... 17 
3.4.1   Standards ............................................................................................................. 17 
3.4.1.1   Sanitary and phytosanitary measures .................................................................... 17 
3.4.1.2   Technical barriers to trade .................................................................................... 18 
3.4.2   Safeguard mechanisms ........................................................................................... 19 
3.4.2.1   Global safeguards ............................................................................................... 19 
3.4.2.2   Bilateral safeguards ............................................................................................. 19 
3.4.2.3   Balance of payments safeguards ........................................................................... 20 
3.4.3   Anti-dumping and countervailing measures ............................................................... 20 
3.4.4   Subsidie s and State-aid .......................................................................................... 21 
3.4.5   Customs-re lated procedures .................................................................................... 21 
3.4.6   Other regulations ................................................................................................... 21 
4   PROVISIONS ON TRADE IN SERVICES AND IN VESTMENT ......................................... 21  
4.1   Scope and definitions ................................................................................................ 21 
4.2   Denial of benefits ..................................................................................................... 22 
4.3   General provisions on trade in services ........................................................................ 23 
4.3.1   Mark et acce ss ....................................................................................................... 23 
4.3.2   National treatment and MFN .................................................................................... 23 
4.3.3   Movement of  natural persons .................................................................................. 23 
4.3.4   Other measur es on inve stment ................................................................................ 25 
4.4   Liberalization commitments ........................................................................................ 27 
4.4.1   Malaysia .............................................................................................................. . 28 
4.4.2   India .................................................................................................................... 30 WT/COMTD/RTA/5/1 
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  4.5   Regulatory provisions ................................................................................................ 32 
4.5.1   Domestic regulation ............................................................................................... 32 
4.5.2   Recognition ........................................................................................................... 32 
4.5.3   Subsidies .............................................................................................................. 33 
4.5.4   Safeguards ........................................................................................................... 33 
4.6   Sector specific provis ions on trade in services ............................................................... 33 
4.6.1   Financial Services .................................................................................................. 33 
4.6.2   Telecommunications ............................................................................................... 33 
5   GENERAL PROVISIONS  OF THE AGREEMENT ............................................................. 33  
5.1   Tran sparency ........................................................................................................... 33 
5.2   Current payments and capital movements .................................................................... 34 
5.3   Exceptions ............................................................................................................... 34 
5.4   Accession and Withdrawal .......................................................................................... 35 
5.5   Institutio nal framework ............................................................................................. 35 
5.6   Disput e settlement ................................................................................................... 36 
5.7   Relationship with other agr eements concluded by the Parties .......................................... 38 
5.8   Government  procurement .......................................................................................... 40 
5.9   Intellectual property rights ......................................................................................... 40 
5.10   Economic cooperation .............................................................................................. 40 
ANNEX 1 ....................................................................................................................... . 41 
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Key Facts 
 
Parties to the Agreement:  India and Malaysia  
 
Date of Signature:   18 February 2011  
 
Date of Entry into Force:  1 July 2011  
 
Date of Notification:   6 September 2011  
 
Full implementation:   India - 30 June 2016 
     Malaysia - 31 December2019 
 
 
1  TRADE ENVIRONMENT 
1.1.  The Comprehensive Economic Cooperation Agreement ("the Agreement") between India and 
Malaysia is India's 20th RTA as notified to the WTO and its 2nd RTA with a member of the Association of South-east Asian Trading Nati ons (ASEAN). The Agreement is Malaysia's 
16
th notification to the WTO.  
1.2.   The Parties to the Agreement have different economies in terms of size, profile and 
development. In 2011 India's GDP was estimated at US$1.85 trillion. Malaysia's GDP in 2011 was estimated at US$288 billion. In terms of trade, India's total merchandise exports and imports 
totalled US$303 billion and US$464 billion respectively, making it the world's 13
th largest exporter 
in 2011 and 7th largest importer (excluding intra EU trade). Malaysia's total merchandise exports 
and imports totalled US$228 billion and US$187 billion making it the world's 18th largest exporter 
and 19th largest importer (excluding intra EU trade). In services, India's rank is fifth largest 
exporter and importer in 2011, while Malaysia was the world's 19th largest exporter and importer 
in 2011 (excluding intra-EU trade).  
1.1  Merchandise trade 
1.3.  Trade between the Parties has grown steadily over the past 10 years. In 2010 India was 
Malaysia's 13th largest import market (US$3.3 billion) an d 8th export market (US$9.2 billion). In 
the same year Malaysia was India's 18th largest import market (US$9.1 billion) and 14th export 
market (US$3.8 billion). India's exports are do minated by manufactures (61.7%) and fuels and 
mining products (23.7%). India's main imports are more evenly split between manufactures (41.4%) and fuels and mining products (39.6%). Malaysia's exports are dominated by 
manufactures (62%) fuels and mining products (20.2%) and agricultural products 17.1%). 
Malaysia's main imports are manufactures (69.2%), fuels and mining products (17.4%) and agricultural products (11.3%). The trade to GDP ratios (2009-2011) of the Parties are 48.1 for India and 167.2 for Malaysia.  
1.4.  Recent developments in global and intra-party trade are presented in Chart 1.1A and B 
below. In 2011 Malaysia's imports from India accounted for 1.8% of its total imports, and for 4.1% of total exports. In the same year, imports by  India from Malaysia comprised 2.0% of total 
imports, and 1.3% of total exports. Over the pe riod 2000-2011 India has had a growing deficit in 
global trade while Malaysia's slight surplus continued over the period. In bilateral trade, India has also run a growing deficit with Malaysia throughout the period. WT/COMTD/RTA/5/1 
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  Chart 1.1 India and Malaysia: Merchandise trade with world and bilateral flows, 2000-
2011 
0.05.010.015.020.025.030.0
0100200300400500
2000 2002 2004 2006 2008 2010A. India 2000-2011
(USD Billions)
Imports from Malaysia (Right Axis)
Exports to Malaysia (Right Axis)
Total Imports
Total Exports
0.05.010.015.020.025.030.0
050100150200250
2000 2002 2004 2006 2008 2010B. Malaysia 2000-2011 
(USD Billions)
Imports from India (Right Axis)
Exports to India (Right Axis)
Total Imports
Total Exports
 
 
Source: UN Comtrade Database. 
 
1.5.  Chart 1.2 shows global and bilateral trade by broad HS Section during 2008-2010. India's 
two main import categories from Malaysia (minerals and machinery which together accounted for 57.4% of its imports from Malaysia) are also Malaysia's two largest global export categories; 
however, while Malaysia's imports from India are dominated by base metals, vegetables, 
machinery and chemicals (which accounted for 63.1% of its imports from India), only chemicals among these imports form a significant share of  India's global exports (10.1%); almost half 
(47.4%) of India's global exports are accounted for by mineral, precious stones, and textiles.  
Chart 1.2 Malaysia and India: product composi tion of merchandise trade, annual average 
(2008-2010) 
43.4 
16.8 8.1 6.4 4.7 4.5 2.6 2.3 2.1 9.0 
37.3 
20.1 10.2 9.7 7.2 6.8 2.7 5.9 20.3 
14.7 
12.4 
10.1 9.3 8.4 6.2 4.4 2.6 2.3 9.2 
44.7 
10.6 9.8 6.6 5.1 4.8 3.3 3.0 2.4 2.2 7.6 
35.4 
16.4 15.7 8.9 6.0 4.6 2.5 10.5 20.8 
17.5 
12.5 12.3 9.2 8.6 4.7 2.7 2.4 2.3 7.0 Malaysia's imports from India
India's imports from MalaysiaPer cent
Total:  US$ 2.6
Total:  US$ 6 billionTotal:  US $148 billion
Total: US $ 311 billionTotal:  US$  193 billion
Total:  US$ 185 billionIndia's global exports
Malaysia's global exportsMalaysia's global imports
India's global imports
Animal 
products
Vegetables
Fats and oilsPrepared 
foods
Minerals
ChemicalsPlastics, 
rubber
Articles of 
wood
TextilesPrecious stones
Base metals
MachineryVehicles
Optical
Other WT/COMTD/RTA/5/1 
WT/REG329/1 
 
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  1.2  Trade in services and investment 
1.6.  Table 1.1A below shows the breakdown of India's commercial services trade between 
Malaysia and the rest of the world as well as investment for 2008-2010. Transportation, travel insurance and financial services represent the largest categories in terms of both exports and 
imports of commercial services. India has continued to enjoy a services trade surplus, with exports 
of commercial services exceeding imports over the period.  
1.7.  India's global investment position is also  described in Table 1.1A, which shows inward and 
outward foreign direct investment (FDI) with the world for the period 2008-2010. India enjoyed a 
surplus in FDI over the period, with inward FDI stock reaching US$205 billion in 2010, up from US$125 billion in 2008. Outward FDI stocks reac hed US$96 billion in 2010, up from US$63 billion 
in 2008.  
Table 1.1 Trade in commercial services an d investment with Malaysia and world, 
2008-2010 A. India  
Unit: in million US$ 
Service Item World  Malaysia 
Exports Imports  Exports Imports  
2008 2009 2010  2008  2009  2010  2008  2009 2010 2008 2009  2010  
Total commercial 
services 106,745 92,631 123,277  87,847  80,327  116,140  0.6 1.7 1.3 1.2 1.4  2.2 
Transportation services 11,565 10,978 13,248  42,665  35,449  46,422  0.1 0.1 0.5 0.2 0.2 0.4 
Travel 11,832 11,136 14,160  9,606  9,310  10,628  0.0 0.0 0.1 0.1 0.1  0.2 
Communication services 2,478 1,484 1,411  1,045  1,280  1,194  0.1 0.1 0.1 0.1 0.1 0.3 
Construction 841 837 524  704 1,079  991 0.0 0.5 0.0 0.0 0.0  0.0 
Insurance services 1,561 1,528 1,782  4,332  4,021  5,004  0.0 0.3 0.0 0.1 0.2 0.3 
Financial services 4,291 3,662 6,003  3,545  3,759  6,787  0.0 0.0 0.1 0.0 0.1  0.1 
Computer and 
information services - 33,807 - 3,787  2,266  2,531  0.1 0.0 0.1 0.0 0.0 0.0 
Royalties and licence 
fees 148 193 129  1,529  1,860  2,438  0.0 0.0 0.0 0.0 0.0  0.0 
Other business services - 28,540 - 20,309  21,036  39,678  0.3 0.6 0.5 0.6 0.5 0.8 
Personal, cultural and 
recreation services 707 468 335  325 268 467 0.0 0.1 0.1 0.0 0.0  0.0 
 World  Malaysia 
 Outward Inward  Outward Inward  
 2008 2009 2010  2008  2009  2010  2008  2009 2010 2008 2009  2010  
Total FDI stocks 63,338 80,839 96,421  125,212  171,218  204,692  - - - - -  - 
Total FDI flows 19,257 15,927 13,151  43,406  35,596  24,159  6.5 6.7 75.2 91.1 52.4 40.4 
 
1.8.  Table 1.1B below shows the breakdown of Ma laysia's trade in commercial services with India 
and the rest of the world during the period 2008-2010. Architectural engineering and other 
technical, communication, research and development and financial services represent the largest categories in imports of commercial services. Exports of commercial services are dominated by 
financial services, architectural engineering and other technical and communication services. 
Malaysia's services trade deficit has continued over the period with imports consistently exceeding exports.  
1.9.  Malaysia's global investment position is also described in Table 1.1B which shows inward and 
outward FDI stock with the world for the period 2008-2010. Overall, over the period Malaysia's 
inward FDI stock enjoyed a surplus, reaching US $102billion in 2010, up from US$74billion in 2008, with outward FDI stock reaching US$97billion in 2010, up from US$67 in 2008.  
Table 1.1 Trade in commercial services and in vestment with India and world, 2008-2010 
B. Malaysia  
Unit: in million US$ 
Service Item World  India 
Exports Imports  Exports Imports  
2008  2009 2010  2008  2009  2010  2008  2009  2010 2008 2009  2010  
Total 6,324 6,028 6,707  8,035  7,729  8,421  162 205 292 135 110  123 
Communication 600  558  700  810 771  984  13  27  67  11  11  19  
Construction and 
installation 1,264  877  1,067  1,408  1,025  1,165  66  11  65  33  12  9  
Insurance on 
services 233  225  263  466 460  467  4  4  9  3  6  2  WT/COMTD/RTA/5/1 
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  Service Item World  India 
Exports Imports  Exports Imports  
2008  2009 2010  2008  2009  2010  2008  2009  2010 2008 2009  2010  
Financial services 84  84  107  232 229  347  2  1  1  3  3  8  
Computer and 
information 1,296  1,449  1,454  1,110  1,200  1,129  42  56  68  19  22  26  
Research and 
development 83  86  110  151 155  164  0  0  0  0  1  3  
Architectural, 
engineering and 
other technical 
services 930  1,080  925  1,053  1,126  1,106  14  86  51  17  11  8  
Business services 1,234  1,088  1,347  1,583  1,489  1,693  14  14  21  25  22  32  
Professional services 509  478  605  872 998  1,070  4  5  6  17  15  10  
Personal, cultural 
and recreational 91  104  129  350 276  297  4  2  2  6  8  5  
 World  India 
 Outward Inward  Outward Inward  
 2008  2009 2010  2008  2009  2010  2008  2009  2010 2008 2009  2010  
Total FDI stocks 66,926  79,663 96,896  73,601  78,995  101,510  - - - - - -  
Total FDI flows 14,965 7,784 13,329  7,172  1,453  9,103  - - - - - - 
 
Exchange rates used; RM per US$: 2007 (3.336); 2008 (3.525); 2009 (3.221).  Source: national authorities, IMF and UNCTAD.  
2  CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
2.1  Background Information 
2.1.  The Comprehensive Economic Co-operati on Agreement between the Government of the 
Republic of India and the Government of Malaysia  was signed by the Parties on 18 February 2011. 
The Parties notified the goods and services aspects of the Agreement to the WTO on 6 September 
2011 under Article V:7 of GATS and Paragraph 4(a) of the Enabling Clause (document 
WT/COMTD/N/37 and S/C/N/599. The text of the Agr eement is available, together with its related 
Annexes, on the following websites: 
 India:  
 http://www.commerce.nic.in  
 
 Malaysia: 
http://www.miti.gov.my/cms/documentstorag e/com.tms.cms.docume nt.Document_b3c9637
d-c0a8156f-5df15df1-d75dff43/MICECA%20-%20edit%20as%20at%2003052011.pdf   
 
2.2.  The Agreement contains 16 Chapters and severa l annexes including on tariffs, rules of origin, 
mutual recognition and specific services commitments which form an integral part of the Agreement. Box I below summarizes the Agreement. 
Box 2.1 
Preamble 
Chapter 1  Initial Provisions and General Definitions  
Chapter 2  Trade in Goods 
Chapter 3  Rules of Origin 
Chapter 4  Customs Co-operation 
Chapter 5  Trade Remedies 
Chapter 6  Sanitary and Phytosanitary Measures 
Chapter 7  Technical Barriers to Trade 
Chapter 8  Trade in Services 
Chapter 9  Movement of Natural Persons  
Chapter 10  Investment  
Chapter 11  Economic Cooperation 
Chapter 12  General Exceptions 
Chapter 13  Transparency 
Chapter 14  Dispute Settlement 
Chapter 15  Institutional Provisions WT/COMTD/RTA/5/1 
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  Chapter 16 Final Provisions 
Annex 2-1 Schedules of Tariff Commitments 
Annex 3-1 Product Specific Rules (Chapter 3) 
Annex 3-2 Method of Calculation of FOB Value 
Annex 3-3 Operational Certification Procedures 
  Attachment 3-3-1 Certificate of Origin 
Annex 6-1  List of Products for Request of Equivalence 
Annex 7-1  List of Products for which Equivalence of Technical Regulations Has Been Accepted 
Annex 7-2  Mutual Recognition Agreements 
Annex 8-1  Schedules of Specific Commitments 
Annex 8-2  Telecommunications 
Annex 9-1  Movement of Natural Persons 
Annex 10-1  Indirect Expropriation  
Annex 10-2  Schedules of Reservations1 
Annex 10-3  Schedules of Reservations 
Annex 12-1  Security Exceptions 
Annex 12-2  Non-Justifiability of Security Exceptions 
 
Source: WTO Secretariat, based on the Agreement. 
 
3  PROVISIONS ON TRADE IN GOODS 
3.1  Import duties and charges,  and quantitative restrictions 
3.1.1  General provisions 3.1.  Chapter 1 of the Agreement sets out Initial Provisions and General Definitions. The objectives 
of the Agreement are set out in Article 1.1 which includes strengthening and enhancing economic, 
trade and investment co-operation between the Pa rties, and to explore new areas of economic 
co-operation and develop appropriate measures for closer economic co-operation between the Parties. The Agreement aims to liberalize and promote trade in goods and services in accordance 
with Article XXIV of the GATT and Article V of the GATs, respectively. Article 1.3, on 
Non-Discrimination, provides that each Party shall ensure that any changes to domestic laws, procedures or regulations etc., undertaken as a re sult of that Party's international agreement or 
treaty with a non-Party in which the other Party is a non-Party shall not adversely affect the 
exports of the other Party.  
3.2.  Chapter 2 of the Agreement concerns Trade in Goods. Article 2.1 notes that applied MFN 
tariff rates shall include in-quota rates, and sha ll refer to the respective applied rate of the 
Republic of India and Malaysia as of 1 July 2008 except for special products in Annex 2-1. 
Article 2.3 of the Agreement provides that the clas sification of goods under the Agreement shall be 
in conformity with the Harmonized System. Article 2.4 requires that national treatment be applied 
to the internal taxation of goods of the other Party.  
3.3.  Article 2.10 permits the Parties to modify th eir Schedules of Concessions, by negotiation or 
agreement between other. Article 2.5 also permits them to unilaterally accelerate the reduction 
and/or elimination of applied MFN tariffs on originating goods of the other Party as scheduled in 
the Agreement. 
3.4.  Article 2.9.1 on Non-Tariff Measures, provides that the Parties shall neither maintain nor 
introduce any non-tariff measure on goods of the ot her Party or on goods intended for export to 
the other Party, except as permitted under the Agreement or the WTO Agreement. Article 2.9.2 
provides that each Party shall ensure that any such measures are transparent and fully compliant with the WTO Agreement.  
                                               
1 No Schedules of Reservations have be en provided under Annex 10-2 or 10-3. WT/COMTD/RTA/5/1 
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  3.1.2  Liberalization of trade and tariff lines 
3.5.  The elimination of tariffs between the Partie s is detailed in their corresponding schedules in 
Annex 2-1. For both Parties, tariff elimination started with the entry into force of the Agreement; the base rates for tariff reductions were the MFN applied rates in force at 1 July 2008 except for 
special products in Annex 2-1. Tariffs are to be reduced and/or eliminated by the Parties according 
to different schedules: those in the normal track are to be reduced and eliminated between 1 July 2011 to 30 September 2013 or between 1 July 2011 and 30 June 2016; products in the sensitive 
track with tariff rates above 5% will be reduced to 5% by 30 June 2016; tariffs for special products 
are to be reduced annually by India between 1 July 2011 and 31 December 2019 and for special 
track products by Malaysia between 1 July 2011 and 31 December 2016; and tariffs on highly sensitive products are to be reduced by 50% (for categories 1 and 2) or 25% (for category 3) by 
31 December 2018. Finally, the Parties also maintain exclusion lists which are subject to an annual 
review with a view to improving market access. 
3.6.  Table 3.1A sets out India's tariff elimination under the Agreement. In 2011 3.1% of tariff 
lines were duty free on an MFN basis, which corresponded to 12.7% of imports from Malaysia 
between 2008 and 2011.
2 India's scheduled liberalization under the Agreement takes place in 
5 stages: on 1 July 2011 an additional 0.6% of ta riff lines became duty-free, corresponding to 
0.5% of imports from Malaysia; on 1 January 2013 a further 6.1% of tariff lines became duty-free, 
(13.4% of imports from Malaysia); on 30 September 2013 the largest number of tariff lines will become duty-free, 56% of tariff lines representing 13.7% of imports from Malaysia. One additional tariff line will become duty free on 1 January 2016, and the last remaining tariff lines covered by 
the Agreement will be liberalized on 30 June 2016, 9.6% of tariff lines representing 6.5% of 
imports from Malaysia. At the end of the implementation period 2,783 tariff lines will remain dutiable, representing 24.7% of the tariff and 53.2% of imports from Malaysia. 
Table 3.1A Tariff elimination commitments  under the Agreement and corresponding 
average trade India
 
Duty phase-
out period Number 
of lines % of total lines in 
India's tariff 
schedule Value of India's imports 
from Malaysia (2008-
2011) 
in million US$ % of India's total 
imports from Malaysia 
(2008-2011) 
MFN duty free 
(2011) 345 3.1 797.5 12.7 
01/07/2011 63 0.6 33.8 0.5 
01/01/2013 683 6.1 838.2 13.4 
30/09/2013 6319 56.0 857.1 13.7 
01/01/2016 1 0.0 0.0 0.0 
30/06/2016 1083 9.6 405.1 6.5 
Remain 
dutiable 2783 24.7 3336.0 53.2 
Total 11277 100.0 6267.6a 100.0 
 
a Only trade falling under HS Chapters 1-97 is included. Note: Based on HS 2007 nomenclature.  Source:  WTO estimates based on data pr ovided by India and WTO-IDB database.  
 
3.7.  Table 3.1B concerns the tariff elimination commitments of Malaysia under the Agreement. As 
of the entry into force of the Agreement, 63.8% of Malaysia's tariff lines were duty free on an MFN 
basis, corresponding to 83% of total imports from India.3 On 1 January 2013, Malaysia eliminated 
duties on a further 444 lines, corresponding to 4.3%  of its tariff and 2.6% of Malaysia's imports 
from India. On 30 September 2013 Malaysia will eliminate tariffs on a further 598 tariff lines 
corresponding to 5.8% of the tariff and 1.6% of im ports from India. On 30 June 2016 Malaysia will 
                                               
2 In 2011 India's MFN applied tariff at the HS 8-digit level contained 11,277 lines. Of these 10,493 
(93%) were subject to ad valorem  rates of duty. Of the remainder 681 lines had mixed rates of duty while 
5 lines had specific rates of duty. 
3 In 2011, Malaysia's MFN applied tariff at the HS 9-digit level contained 10,389 lines. Of these 10,313 
(99.3%) lines carried ad valorem  rates of duty; 39 had specific rates, while 35 and 2 lines respectively had 
compound and mixed rates of duty. WT/COMTD/RTA/5/1 
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  eliminate tariffs on 895 lines, corresponding to 8.6% of the tariff and 4.6% of imports from India. 
On 1 January 2017 and 2018 Malaysia will eliminate a further 2 and 1 tariff lines. At the end of the 
implementation period (31 December 2019) Malaysia will eliminate tariffs on 34 tariff lines. Thereafter, 1,790 tariff lines (17.2% of the tariff) will remain dutiable, corresponding to 8.1% of 
imports from India.  
Table 3.1B Tariff elimination commitments under the Agreement and corresponding 
average trade Malaysia
 
Duty phase-
out period Number 
of lines % of total lines in 
Malaysia's tariff 
schedule Value of Malaysia's 
imports from India 
(2008-2010) 
in million US$ % of Malaysia's total 
imports from India 
(2008-2010) 
MFN duty 
free (2011) 6,625 63.8 2,144.2 83.0 
01/01/2013 444 4.3 66.6 2.6 
30/09/2013 598 5.8 41.7 1.6 
30/06/2016 895 8.6 119.8 4.6 
01/01/2017 2 0.0 0.0 0.0 
01/01/2018 1 0.0 0.0 0.0 
31/12/2019 34 0.3 1.1 0.0 
Remain 
dutiable 1,790 17.2 209.1 8.1 
Total 10,389 100.0 2,582.5 a 100.0 
 
a Only trade falling under HS Chapters 1-97 is included. Note: Based on HS 2007 nomenclature.  Source:  WTO estimates based on data provided by Malaysia.  
3.1.3  Liberalization schedule 
3.8.  Article 2.5.1 of the Agreement provides that  each Party shall gradually liberalize applied MFN 
tariff rates on originating goods of the other Party as provided in its Schedule of Tariff 
Commitments set out in Annex 2-1 to the Agreement. Article 2.5.2 notes that each Party shall be free to unilaterally accelerate the reduction and elimination of MFN tariff rates as set out in its 
Annex 2-1 Schedule to the Agreement. 
3.1.3.1  India 3.9.  Table 3.2 shows India's liberalization commitments under the Agreement organized by 
HS Section product category. Of the 11,277 tariff lines forming India's tariff schedule, 345 were 
duty-free on an MFN basis in 2011. Of the 63 li nes liberalized upon entry into force of the 
Agreement, most fall under Section XVI (Machinery and mechanical appliances), XI (Textiles) and XVIII (Optical, Photographic). The bulk of libera lization takes place in 2013, by which time 7002 
tariff lines will become duty-free. Most of the lines liberalized in 2013 concern HS sections V 
(Minerals), VI (Chemicals) and XV (Base metals). Of the 2783 lines remaining dutiable at the end of the liberalization period, Section II (Vegetable products), IV (Prepared foodstuffs), VI (Chemical 
products), VII (Plastics), and XVI and XVII (Vehicles,  aircraft). The average tariff on the products 
remaining dutiable will be 17%.  
Table 3.2 India: Tariff elimination under the Agreement, by HS section
 
HS 
Section MFN 
average 
% Total 
No. of 
lines MFN duty-free 
(2011) Number of duty-free lines No. of 
lines 
remaining 
dutiable Avg. Final 
Tariff 
(Dutiable) 
% 01/07/2011  
01/01/2013  
30/09/2013  
01/01/2016  
30/06/2016  
I 30.8 349     8 239   3 99 29.9 
II 36.3 558 16 3 12 143   99 285 43.1 
III 17.7 119 23     21   17 58 19.3 
IV 47.1 407       129   44 234 59.7 
V 5.7 313 7   200 60   3 43 6.2 WT/COMTD/RTA/5/1 
WT/REG329/1 
 
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  HS 
Section MFN 
average 
% Total 
No. of 
lines MFN duty-free 
(2011) Number of duty-free lines No. of 
lines 
remaining 
dutiable Avg. Final 
Tariff 
(Dutiable) 
% 01/07/2011  
01/01/2013  
30/09/2013  
01/01/2016  
30/06/2016  
VI 8.6 2233 4 4 131 1557   47 490 5.1 
VII 9.6 585   2 3 126   86 368 6.6 
VIII 7.1 134 35     39     60 5.0 
IX 9.1 193     35 141   15 2 5.0 
X 9.1 272 14 1 19 192   22 24 6.0 
XI 9.8 1870 28 14 20 740 1 400 667 6.5 
XII 10.0 105       34   1 70 5.1 
XIII 9.5 263   3 27 199   6 28 5.4 
XIV 6.8 91 24   2 65       0.0 
XV 7.0 1259 2   198 982   33 44 5.7 
XVI 7.2 1659 149 25 21 1021   263 180 5.8 
XVII 29.7 263 10   7 136   7 103 50.3 
XVIII 8.1 353 25 11   281   23 13 6.7 
XIX 10.0 20       20       0.0 
XX 9.7 214 5     180   14 15 8.0 
XXI 8.2 17 3     14       0.0 
Total 12.4 11277 345 63 683 6319  1 1083 2783 17.0 
Note: Based on HS 2007 nomenclature. 
 Source: WTO estimates based on data pr ovided by India, WTO-IDB database.  
 
3.10.  Chart 3.1 shows a comparison of average dutiable rates in the HS Sections where 
preferential duties remain once the Agreement is fully implemented. The comparison is made 
between India's average preferential and MFN rates for lines which remain subject to preferential 
duties only. As can be seen from the Chart, averag e preferential duties are, for most HS sections 
from Chapters 25-96, lower than the correspondi ng MFN duties indicating preferential tariff 
reductions. Most tariff rates for Chapters 1-24 mirror the MFN duties. The highest average 
preferential tariffs are found in Chapters 22 (bever ages, spirits and vinegar which is subject to an 
average rate of 150%), 21 (miscellaneous edible preparations which has an average rate of 90%), 17 (sugars and sugar confectionary with an average rate of 60%) and 2 (meat products with an average rate of 58%); for all these chapters the av erage preferential tariff is the same as the 
corresponding average MFN applied rate.  
Chart 3.1 India: Average of du tiable rates, by HS Chapter 
0153045607590105120135150
1 2 3 4 6 7 8 9 1 01 11 21 41 51 61 71 81 92 02 12 22 32 4
051015202530354045505560
25 27 28 29 30 31 32 33 34 35 36 37 38 39 40 42 44 48 49 51 52 53 54 55 57 59 61 62 63 64 67 68 69 70 73 74 76 83 84 85 87 90 94 95 96HS  01-24
HS 25-97Average rate of duty (%) Average rate of duty (%)  HS Chapter
HS 
Chapter
MFN Preferential 
Note: For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included. 
Source: WTO Secretariat estimates based on the data provided by India WT/COMTD/RTA/5/1 
WT/REG329/1 
 
- 12 - 
 
  3.1.3.2  Malaysia 
3.11.  Table 3.3 shows Malaysia's liberalization commitments under the Agreement organized by 
HS Section product category. Of the 10,389 tariff lines forming Malaysia's schedule, 6,625 were duty-free on an MFN basis in 2011. Of the 444 li nes liberalized upon entry into force of the 
Agreement, the tariff elimination is spread over a number of sections, the largest number of 
duty-free lines falling under sections III (Animal or vegetable fats), VI, XV and XVI. The next 
significant stages of tariff liberalization occu rs on 30 September 2013 and 30 June 2016, with the 
addition of 598 and 895 tariff lines becoming duty  free; tariff liberalization is distributed over the 
HS sections, with the majority of liberalization falling across sections IV, IX, X, XVII, XI, XV, XVI 
and XX (Miscellaneous manufactured). The average ta riff that applies to the excluded lines is 
12.2% compared to an overall MFN applied average of 6.0%. 
Table 3.3 Malaysia: Tariff elimination under the Agreement, by HS section
 
HS 
Section MFN 
average
% Total 
No. of 
lines MFN duty-
free (2011) Number of duty-free lines  No. of lines 
remaining 
dutiable Avg. Final Tariff 
(Dutiable) 
% 01/01/2013 
30/09/2013 
30/06/2016 
01/01/2017 
01/01/2018 
31/12/2019 
I 2.7 325 280 1  23 1    20 27.3 
II 2.7 354 262 34 7 9    42 11.8 
III 2.5 166 98 50  4 14      
IV 2.6 462 309 17 81 2    53 5.0 
V 1.4 203 178 14  1 3    7 17.1 
VI 1.9 1,083  941 38 10 3   4 87 13.4 
VII 13.2 655 199 11  20 24 1  12 388 7.2 
VIII 0.3 99 96  3       
IX 1.4 2,024  1,880 18   126      
X 10.4 333 124 3 26 178    2 10.0 
XI 7.7 1,075  476 15  265     319 5.7 
XII 6.6 84 51  4 17   1 11 4.7 
XIII 18.2 204 49 11  5 2  1 1 135 15.5 
XIV 0.4 62 58 3 1       
XV 11.3 1,020  299 93  52 195 1  6 374 17.5 
XVI 5.4 1,257  859 85 62 184   10 57 5.9 
XVII 17.7 463 112 25  1 61    264 21.2 
XVIII 0.8 266 247 12 1 6      
XIX 14.2 26 2       24 15.4 
XX 9.1 218 99 14 32 66    7 5.0 
XXI 2.0 10 6   4      
Total 6.0 10,389  6,625 444 598 895 2 1 34 1,790  12.2 
 
Note: Based on HS 2007 nomenclature.  Source: WTO estimates based on data provided by Malaysia.  
3.12.  Chart 3.2 shows a comparison of averag e dutiable rates in those HS sections where 
preferential duties remain. The comparison is be tween Malaysia's average preferential tariff and 
MFN rates for lines which remain subject to preferential duties only. As can be seen from the 
Chart, average preferential duties are, for most sections, lower than the MFN rate, indicating 
preferential tariff reductions, particularly in respect of Chapters 25-96. The highest average preferential tariffs are found in Chapters 7 (edi ble vegetables with an average rate of 90%), 
2 (meat products with an average rate of 43.3%) and 10 (cereals with a rate of 30%).  WT/COMTD/RTA/5/1 
WT/REG329/1 
 
- 13 - 
 
  Chart 3.2 Malaysia: Average of du tiable rates, by HS Chapter 
0102030405060708090
01 02 04 07 08 09 10 22 24
0102030405060708090
25 29 34 36 39 48 54 56 58 60 62 64 69 72 76 84 87 94HS  01-24
HS 25-97Average rate of duty (%)Average rate of duty (%)  HS 
Chapter
HS 
Chapter
MFN Preferential
 
 
Note: For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included. 
* HS chapter 22 contains specific duties only.  Source: WTO Secretariat estimates based on the data provided by Malaysia.  
3.13.  In addition to agreeing to eliminate tariffs  at the end of the transition period, the Parties 
agreed to reduce rates (but not eliminate them) on certain products. Table 3.4 indicates India's 
tariff reduction commitments under the Agreement. India has scheduled such reductions with respect to 1,596 lines corresponding to 14.2% of its tariff schedule and amounting to 13.8% of 
imports from Malaysia during 2008-2010. Chart 3.3 below shows average remaining preferential 
and MFN tariffs as a result of these tariff reductions. Significant preferences are provided in HS Chapter 87 (average preferential rate of 5.4% compared to an MFN average of 40%) and HS 9 (41.2% compared to 84.4% MFN).  
Table 3.4 India: Tariff reduction commitmen ts under the Agreement and corresponding 
average trade
 
Duty 
reduction 
period Number 
of lines % of total lines in 
India's tariff 
schedule Value of India's imports 
from Malaysia (2008-
2010) in million US$ % of India's total 
imports from Malaysia 
2008-2010 
01/07/2011 1,592 14.117 864.8 13.8 
01/01/2013 2 0.018 0.0 0.0 
01/01/2016 2 0.018 0.3 0.0 
Total 1,596 14.153 865.1 13.8 
 
Note: Based on HS 2007 nomenclature. 
 Source:  WTO estimates based on data provided by India. WT/COMTD/RTA/5/1 
WT/REG329/1 
 
- 14 - 
 
  Chart 3.3 India: Average of re duced rates, by HS Chapter 
0102030405060708090
01 03 04 08 09 15 16 18
01020304050
25 28 29 30 31 32 33 34 35 37 38 39 40 42 44 48 49 51 52 53 54 55 59 61 62 63 64 67 68 69 70 73 74 84 85 87 90 94 96HS  01-24
HS 25-97Average rate of duty (%) Average rate of duty (%)  HS Chapter
HS 
Chapter
MFN Preferential 
 
Note: For the calculation of averages, specific rates are excluded and the ad valorem parts of alternate 
rates are included. 
 Source: WTO Secretariat estimates based on the data provided by India. 
 
3.14.  Table 3.5 indicates Malaysia's tariff reduction commitments under the Agreement. Malaysia 
has scheduled such reductions with respect to 778 lines corresponding to 7.5% of its tariff schedule and amounting to 2% of its imports from India. Chart 3.4 below shows average 
remaining preferential and MFN tariffs by HS Ch apter. Significant preferences are provided by 
Malaysia to India for a number of Chapters in cluding HS 4 (10% compared to 50%), 96 (5% 
compared to 45%), and 36 (5% compared to 40%). 
Table 3.5 Malaysia: Tariff reduction commitments under the Agreement and 
corresponding average trade  
Duty 
reduction 
period Number 
of lines % of total lines in 
Malaysia's tariff 
schedule Value of Malaysia's 
imports from India 
(2008-2010) 
in million US$ % of Malaysia's total 
imports from India 
2008-2010 
01/07/2011 778 7.5 51.3 2.0 
01/01/2013 54 0.5 3.6 0.1 
01/01/2015 7 0.1 0.6 0.0 
01/01/2016 3 0.0   
Total 842 8.1 55.4 2.1 
 
Note: Based on HS 2007 nomenclature.  Source:  WTO estimates based on data provided by Malaysia. WT/COMTD/RTA/5/1 
WT/REG329/1 
 
- 15 - 
 
  Chart 3.4 Malaysia: Average of reduced rates, by HS Chapter 
01020304050
04 08 10
01020304050
25 28 29 32 34 35 36 38 39 40 52 54 55 56 57 58 59 60 61 62 63 64 68 69 70 72 76 82 84 85 87 94 96HS  01-24
HS 25-97Average rate of duty (%) Average rate of duty (%)  HS Chapter
HS Chapter
MFN Preferential
 
 
Note: For the calculation of averages, specific rates are excluded and the ad valorem parts of alternate 
rates are included. 
 Source: WTO Secretariat estimates based on the data provided by Malaysia.  
3.1.4  Tariff rate quotas 
3.15.  Malaysia has retained tariff rate quotas in respect of products listed in Annex 2-1(e) Special 
Track for 4 products listed under (ii), which comprise 040700111, hens' eggs; 040700112, ducks' 
eggs; 040700910 hens' eggs and 040700920 ducks' eggs , all with an out of quota duty rate of 
10%. These TRQs remain in force throughout the duration of the Agreement.  
3.2  Rules of origin 
3.16.  Chapter 3, Articles 3.1-3.14 and Annex 3-1,  3-2 and 3-3 of the Agreement concern Rules of 
Origin, as well as Article 2.84. Article 3.1 sets out the definitions used in the Chapter. Article 3.2 
provides that good imported by a Party which are consigned directly shall be deemed to be originating and eligible for preferential tariff treatment if they are (a) wholly obtained or produced 
within the territory of the exporting Party per Articl e 3.3, or (b) not wholly obtained or produced in 
the exporting territory but are eligible under Article 3.4 (not wholly obtained or Article 3.5 (cumulative rule of origin).  
3.17.  Article 3.3 of the Agreement on wholly obtained or produced goods provides that goods that 
fall within the situations described in paragraphs (a)-(j) shall be deemed to be wholly obtained or produced in the territory of a Party. Article 3.4.1 provides that (a) when a good satisfies the 
product specific rules of Annex 3-1 or (b) when non-originating materials have undergone a 
                                               
4 Article l2.8 provides that the Rules of Origin and Operational Certification Procedures applicable to the 
goods covered under this Chapter are set out in Chapter 3 and its Annexes.  WT/COMTD/RTA/5/1 
WT/REG329/1 
 
- 16 - 
 
  change in tariff classification at the six-digit HS  level and the qualifying value content of the goods 
is not less than 35% of f.o.b. value5 and final manufacturing is perf ormed in the territory of the 
exporting Party, the goods shall be deemed to be originating. The formulae for calculating qualifying value content are set out in Article 3.4.2. 
3.18.  Article 3.5 permits the cumulation of or igin when a good originating in one Party per 
Article 3.2 is then consumed in the manufacture of  a finished good in the territory of the other 
Party. Article 3.6.1, on de minimis, provides that  a good that does not undergo a change in tariff 
classification pursuant to Article 3.4 and Annex 3-1 can still qualify as originating if (a) for goods 
(except those under Chapters 1-14 and 50-63 of the HS) the value of non-originating materials used in its production that do not undergo a change  in tariff classification does not exceed 10% of 
the f.o.b. value of the good, (b) goods (Chapters 50-63 of the HS) the total weight of non-
originating textile materials used that do not undergo a change in tariff classification does not 
exceed 8% of the total weight of materials used, and (c) the good meets all other criteria under the Chapter for an originating good.  
3.19.  Article 3.7 sets out the treatment of minimal operations and processes in the determination 
of origin. Article 3.7.1 lists 10 examples of processing  that individually or collectively will not result 
in the creation of an originating good. Article 3. 7.2 lists examples of processing in respect of 
textiles and textile goods that shall not be considered to constitute sufficient processing to 
constitute an originating good.  
3.20.  Article 3.8, on direct consignment of goods, provides that an originating good is considered 
to have been directly consigned from the territory of one Party to that of the other Party, (a) if 
they pass directly from the territory of one Party to  another, (b) if they transit the territory of a 
non-Party subject to several conditions. Article 3.9 concerns treatment of packing materials and containers. Article 3.9.1 provides that if a good has been subject to a change in tariff classification, 
packing materials and goods shall not be taken into account in determining origin. If however a 
good's origin is subject to qualifying value content, then the packing materials and containers shall be used in calculation of the origin of the good, provided only that such materials form a whole 
with the good and the good is packaged in such containers for the purpose of retail sale. 
Article 3.10 on accessories, spare parts, tools and instructional or other information materials provides in Article 3.10.1 that any such materials shall be treated as originating in the case of originating goods, and shall not be taken into account when determining whether all non-
originating materials used in production undergo a change in tariff classification.  
3.21.  Article 3.13 provides that a certificate of orig in shall be accepted as eligible for preferential 
tariff treatment. Article 3.14 provides that Implem entation of the Chapter shall be considered by 
the Sub-Committee on Trade in Goods established under Article 15.2 of the Chapter. 
3.22.  Annex 3-1 of the Agreement sets out produc t specific rules for the determination of origin. 
Part 2 of Annex 3-1 lists by tariff heading, sub he ading together with the product specific rule to 
be used in determining origin of the concerne d product. Annex 3-2 se ts out the method of 
calculation of FOB value in determination of origin. Annex 3-3 concerns operational certification procedures, including the methodology for applicatio n for a certificate of origin, and its validity. A 
prescribed form for application for a certificate of origin is contained in Attachment 3-3-1 to the 
Agreement.  
3.3  Export duties and charges,  and quantitative restrictions 
3.23.  Article 2.9 of the Agreement concerns non-tariff measures (export) and provides in 
Article 2.9.1 that the Parties shall not institute or maintain any non-tariff measure on the 
exportation or sale of goods for export from the other Party except in accordance with the WTO Agreement.  
                                               
5 Annex 3-2 provides formulae for determination of f.o.b. value. WT/COMTD/RTA/5/1 
WT/REG329/1 
 
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  3.4  Regulatory provisions on trade in goods 
3.4.1  Standards 
3.4.1.1  Sanitary and phytosanitary measures 3.24.  Chapter 6 of the Agreement concerns Sanitary and Phytosanitary Measures (SPS). The 
objectives for the Chapter are set out in Article 6.1, and include the establishment of a mechanism 
to issue decisions on equivalence of measures maintained by a Party (Article 6.1(c)). Article 6.3 provides that the definitions used in Annex A of  the WTO Agreement on Sanitary and Phytosanitary 
Measures (SPS) apply to the Chapter. 
3.25.  Article 6.5, on international standards and harmonization, provides in Article 6.5.2 that the 
Parties may adopt SPS measures that have a higher level of protection than those based on an international standard, guideline or recommendation, if a scientific justification exists, reflecting 
Article 3.3 of the WTO Agreement on SPS. Under Article 6.6 on equivalence, Article 6.6.2 provides 
that Parties have agreed a list (in Annex 6-1 of the Agreement) of products that would be subject to a decision on equivalence. Consultations are mandated to commence within 3 months of entry 
into force of the Agreement. The procedures for consultations on the list in Annex 6-1 are 
described in Article 6.6.4-5. The consultations have not commenced yet. The principles as contained within the SPS chapter are however being referred to and applied by the parties to their 
routine regulatory interaction. 
3.26.  Article 6.6.6 permits the Parties to with draw or suspend equivalence subject to listed 
conditions and a procedure of consultations set out in Article 6.6.6(a)-(c). Any decision to 
withdraw or suspend equivalence rests solely with  the importing Party, and shall be explained to 
the exporting Party per Article 6.6.7.  
3.27.  Article 6.7 on regionalization provides (Article 6.7.1) that the Parties recognize the concept 
of regionalization, zoning and compartmentalization  as set out in Article 6 of the SPS Agreement, 
OIE and IPPC standards. Article 6.8.1 (certification) provides that the Parties shall ensure 
compliance with Annex C of the SPS Agreement. That Article also provides that Parties shall ensure that; (a) certificates shall ensure a link to the consignment concerned, (b) both importing and 
exporting Parties will introduce checks and cont rol measures to prevent false, fraudulent or 
misleading certification, and (c) that certificates are prepared in the English language. Article 6.8.2 
provides that the Sub-Committee established under  Article 15.2 may, through decisions by the 
competent authority, adopt model certificates for specific sectors and agree on rules to be followed 
in the case of online certification, withdrawal or replacement of certificates. 
3.28.  Article 6.9 concerns verification. Article 6.9 provides that each Party shall have the right to 
audit and verification of the procedures of the other Party, pursuant to the principles set out in 
Article 6.9.2. Article 6.9.3 empowers the Sub-Committee on SPS created under Article 15.2 to 
specify procedures and documentation requirements for verification, taking into account the work of international organizations in that regard. Article 6.13 provides that that Sub-Committee shall 
consider matters relating to the implementation of the Chapter.  
3.29.  Article 6.10 on import checks, provides in Article 6.10.1 that control, inspection and 
approval procedures must be in accordance with Annex C of the SPS Agreement. Article 6.10.2 requires that import checks applied to imported animals, animal products, plants and plant 
products traded between the Parties shall be based on risk associated with such importations. 
Import checks must be carried out in the least trade restrictive manner possible, based on the principles set out in sub-paragraphs (a)-(e). Ar ticle 6.10.3 requires that information on the 
frequency of such import checks shall be provided upon request, and any change to the frequency 
of such checks shall be notified and co nsultations undertaken upon request.  
3.30.  In Article 6.11 on transit the Parties reaffirm their obligations on transit under Article V of 
the GATT 1994. Article 6.11 also permits the inspection of goods in transit in the event of 
identifiable SPS risks.  WT/COMTD/RTA/5/1 
WT/REG329/1 
 
- 18 - 
 
  3.31.  Article 6.12 sets out transparency requirem ents, and in 6.12.1 provides that by the entry 
into force of the Agreement the Parties shall info rm each other of its SPS import requirements, 
including the models for official certificates and attestations. No additional arrangements have been developed or adopted except the information that is published in the website of each 
respective competent authority. 
3.32.  Article 6.14.1 provides that technical consultations may be requested by either Party and 
should be held within 30 days from the request, and can be completed by e-mail, telephone or 
videoconference, or any other means agreed by the Parties. Article 6.15 on co-operation exhorts 
the Parties to explore opportunities for further co-operation. An inclusive list of issues which could be the subject of further co-operation are set out in Article 6.15.1 (a)-(c). Article 6.16 on exchange of information and consultations requires  the Parties to (1) give prompt and positive 
consideration to any request for consultation on issues pertaining to the Chapter, (2) to enhance 
communications and exchange of information on issues under the Chapter and to facilitate compliance with one another's SPS measures and elimination of unnecessary barriers to trade in 
goods and (3) to respond to any requests for information from the other Party within 30 days. The 
list of products for which Equivalence of Technical Regulations has been accepted has not been developed yet. No Mutual Recognition Agreements has been concluded between the Parties. 
3.4.1.2  Technical barriers to trade 
3.33.  Chapter 7, Articles 7-15 of the Agreement concern Technical Barriers to Trade (TBT). The 
objectives of the Chapter are set out in Article 7.1 (a)-(f).  
3.34.  Article 7.2.1 describes the scope of the Chapter, which applies to the preparation, adoption 
and application of standards, technical regu lations and conformity assessment procedures. 
Article 7.2 provides that the Chapter does not apply to (a) technical specifications prepared by governmental bodies for production or consumption requirements of such bodies or (b) SPS 
measures as defined in Annex 1A to the WTO Agreement on SPS. The definitions contained in 
Annex 1 of the WTO TBT Agreement are incorporated by reference in Article 7.3 of the Agreement.  
3.35.  In Article 7.4.1 the Parties affirm their rights and obligations under the WTO TBT 
Agreement. Article 7.4.2 requires that the Partie s ensure compliance in the implementation of the 
Chapter by central government bodies within its territory, and take such measures as are reasonable and available to ensure compliance by local and non-governmental bodies within its territory. 
3.36.  Article 7.5 on joint co-operation, exhorts the Parties to establish dialogue at both the 
horizontal and sectoral levels between the competent authorities and other regulators (Article 7.5.1). Article 7.5.2 requires the Parties to work to identify, develop and promote trade 
facilitating measures. Article 7.5.2(a)-(f) set out a non-exclusive list of such issues.  
3.37.  Article 7.6 concerns standards. It provides that each Party shall use relevant international 
standards and recommendations issued by an international standardizing body as a basis for its 
conformity assessment procedures, in accordance with Articles 2.4 and 5.4 of the Agreement on 
TBT. Article 7.6.1 provides that when such international standards or relevant international guides and recommendations have not been used at the basis of a measure the Party applying such measures shall provide an explanation of the ra tionale for such measures upon request by the 
other Party. Article 7.6.2 requires the Parties to cooperate in regional and international 
standardizing bodies to ensure that standards developed are trade facilitating and do not create unnecessary barriers to trade. Article 7.6.3 concerns cooperation between the Parties in relation to 
their participation in international fora, including the WTO Committee on TBT. Article 7.6.4 
concerns the exchange of information between  the Parties on (a) technical regulation, 
(b) standardization, and the use of international standards, and (c) cooperation agreements used 
by either Party in standardization.  
3.38.  Article 7.7 concerns technical regulations. Each Party is requested to give consideration to 
accepting the regulations of the other Party as equivalent, per Article 7.7.1. Article 7.7.2 requires a Party receiving a request for acceptance of equivalence to commence consideration of the request 
within 30 days. The request must be determined wi thin 6 months. If the request for equivalence is 
rejected it must provide an explanation of its re fusal (if requested) and explain the requirements WT/COMTD/RTA/5/1 
WT/REG329/1 
 
- 19 - 
 
  under which equivalence will be considered. The Pa rties have set out lists of products for which 
equivalence of technical regulations has been accepted in Annex 7-1 to the Agreement. No Mutual 
Recognition Agreements have been concluded between the Parties. 
3.39.  Article 7.8-1-10 concern conformity assessment procedures. In Article 7.8.1 the Parties 
recognize a range of mechanisms that exist to fac ilitate the acceptance of the results of conformity 
assessment, which are set out in paragraphs (a)-(g). Article 7.8.5 describes modalities for co-operation on conformity assessment. Article 7.8.6 provides that each Party shall accredit, 
approve or otherwise recognize conformity assessmen t bodies in the territory of the other Party on 
terms no less favourable than those it accords to conformity assessment bodies in its own territory. If a Party refuses a request for accreditation, approval or recognize conformity assessment in the other Party it shall, upon request, explain the reasons for its decision as well as 
the basis upon which such recognition may be achieved. 
3.40.  Article 7.9 concerns mutual recognition agreements (MRAs). Article 7.9.1 requires a Party to 
enter into negotiations for possible MRAs on conformity assessment procedures conducted by 
conformity assessment bodies of the exporting Pa rty within 60 days of a request by the other 
Party. The Parties will take a decision on any agreements within 12 months of the commencement of those negotiations. Article 7.9.2 (a)-(c) lists considerations that the Parties should take into 
account in conducting the negotiations under Article 7.9.1. In Article 7.10.1 the Parties reaffirm 
their obligations under Article 5.2 of the Agreem ent on TBT in respect of fees and processing 
periods. Each Party shall ensure that any fees imposed for assessing the conformity of products originating in the territory of the other Party ar e proportionate to the costs of the authorities 
conducting such assessment.  
3.41.  Article 7.11 concerns trade facilitation. In Article 7.11.1 the Parties reaffirm Article V of the 
GATT 1994, and under Article 7.11.2, whenever approp riate, the importer or representative should 
be given the opportunity to contribute any relevant information to assist the importing Party in 
taking a decision concerning the consignment subject to technical regulations and conformity assessment procedures. In Article 7.12 (on labelling), Article 7.12.1 the Parties recognize that 
labelling requirements may be necessary to inform consumers of certain essential characteristics 
of products, but should not be used to create unne cessary obstacles to trade. Article 7.12.2(a)-(d) 
provides a list of requirements in relation to mandatory labelling provisions. 
3.42.  Article 7.13 provides that the Sub-Committee on TBT established under Article 15.2 shall 
consider matters relating to the implementation of the Chapter. Article 7.15 on technical 
consultations describes the modalities for the holding of such consultations relating to the Chapter.  
3.4.2  Safeguard mechanisms 
3.4.2.1  Global safeguards 
3.43.  There are no provisions in the Agreement concerning global safeguards.  3.4.2.2  Bilateral safeguards 
3.44.  Chapter 5, on Trade Remedies, Section A, concerns the imposition of bilateral safeguard 
measures. The definitions in Article 5.1 mirror or summarize the definitions and provisions set out in Article 4 and Article 6 of the WTO Agreement on Safeguards. During the transition period to full 
implementation of commitments, Article 5.2 pe rmits the application of bilateral safeguard 
measures and provides that if (as a result of the duty reduction or elimination under the 
Agreement) an originating product is imported in increased quantities (absolute or relative) and under such conditions as to cause or threaten serious injury to a domestic industry, the other 
Party may apply safeguard measures. Such measures may consist of (a) the suspension of further 
reduction in customs duty on the originating product concerned, (b) an increase in customs duty on the originating product to a level not beyond the lesser of (i) the MFN applied duty rate in effect 
on the date the safeguard measure is taken or (ii) the MFN applied rate on the date prior to the 
commencement of the investigation. WT/COMTD/RTA/5/1 
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  3.45.  Article 5.3 sets out the scope and duration of bilateral safeguard measures. Article 5.3.1 
provides that a Party shall be applied for an initial period of 2 years, extensible by a further period 
of 2 years, provided that the conditions for application of the measure remain valid. Per Article 5.3.2, all safeguard measures must termin ate at the end of the transition period for the 
concerned product. Article 5.3.6 provides that a safeguard investigation must be terminated by if 
the volume of imports of the concerned product co nstitutes less than 3% of total imports. Under 
Article 5.3.7, a Party shall not apply a bilateral safeguard or provisional measure on an originating 
product that is already subject to a measure under Article XIX of the GATT 1994, the WTO 
Agreement on Safeguards or the Agreement on Ag riculture. Under Article 5.3.8 when a Party is 
contemplating application of a safeguard measure under Article XIX of the GATT 1994, WTO Agreement on Safeguards or the Agreement on Agriculture in respect of a product already subject 
to a bilateral safeguard, it shall first terminate the bilateral safeguard measure before applying a 
measure under one of those Agreements. Article 5.3.10 defines "transition period" as "a period from the date of entry into force of this Agreement until seven years from the date of completion 
of tariff elimination or completion of tariff reduction …". 
3.46.  The requirements for conduct of bilateral sa feguard investigations are set out in Article 5.4. 
Pursuant to Article 5.4.1, a bilateral safeguard measure can only be applied following an 
investigation in accordance with the procedures set out in Articles 3 and 4.2 of the WTO 
Agreement on Safeguards. Article 5.5.1 permits the application of Provisional measures in critical circumstances, following a preliminary determinatio n of clear evidence of increased imports of an 
originating good from the other Party have caused or threatened serious injury as a result of the 
reduction or elimination of a duty. Article 5.6 sets  out notification and consultation requirements 
for a Party initiating an investigation. Article 5.7 closely follows Article 8 of the WTO Agreement on Safeguards. Article 5.7.1 requires that a Party proposing to apply a bilateral safeguard measure 
must consult with the other Party in order to mutually agree appropriate trade liberalizing 
compensation in the form of concessions havi ng substantially equivalent trade effects.  
3.4.2.3  Balance of payments safeguards 
3.47.  Article 12.4 of the Agreement in Chapter 12 on Exceptions (see below) concerns Measures 
to Safeguard the Balance of Payments. Article 12.4.1 provides that where a Party is in serious balance of payments and external financial difficulties or under threat thereof it may: (a) for goods, in accordance with the GATT 1994 and the WTO Understanding on the 
Balance-of-Payments Provisions of the GATT 1994, adopt restrictive import measures; (b) for 
services, adopt or maintain restrictions on trade in services on which it has undertaken specific commitments, including on payments or transfers for transactions related to such commitments, 
(c) for investments, adopt or maintain restrictions with regard to payments or transfers relating to 
investment. The paragraph also explicitly provides that particular pressures on balance of payments in a Party may necessitate the use of restrictions to ensure, inter alia, the maintenance 
of a level of financial reserves adequate for the implementation of its programme of economic 
development.  
3.48.  Article 12.4.2 provides that restrictions adopted or maintained under paragraph 12.4.1 (b) 
or (c) shall (a) be consistent with the Articles  of Agreement of the IM F, (b) avoid unnecessary 
damage to the commercial, economic and financial interests of the other Party, (c) not exceed 
those necessary to deal with the circumstances, (d) be temporary and be phased out progressively 
as the situation improves, and (e) be applied in a manner that the other Party is treated no less 
favourably than any country that is a non-Party to the Agreement.  
3.4.3  Anti-dumping and countervailing measures 3.49.  Chapter 5 on Trade Remedies, section B concerns anti-dumping measures. Article 5.8 
requires each Party to keep in view the recomme ndations of the WTO Agreement on Anti-Dumping 
Practices when conducting an anti-dumping investig ation. Article 5.9 establishes a lesser duty rule. 
The practice of "zeroing" is prohibited by Arti cle 5.10, regardless of the comparison bases used. 
Article 5.12 provides that the Parties may discuss  issues related to the implementation of the 
Chapter in the Joint Committee established under Article 15.1 of the Agreement.  
3.50.  There are no specific provisions in the Agreement on countervailing duties.  WT/COMTD/RTA/5/1 
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  3.4.4  Subsidies and State-aid 
3.51.  There are no specific provisions in the Agreement on subsidies and state aid.  
3.4.5  Customs-related procedures 3.52.  Chapter 4, Articles 4.1-15 concern Customs Co-operation between the Parties. Article 4.5.1 
provides that the Parties shall, to the extent possible, adopt or maintain simplified customs 
procedures for the efficient clearance of goods in order to facilitate trade between the Parties. Article 4.5.2 provides that in order to ensure prompt clearance of goods, the Parties shall (a) 
provide for the clearance of goods within the time  limits stipulated by Customs Laws, (b) provide 
for advance electronic submission of an entry and processing of information before the arrival of the goods, (c) allow traders to interact with the customs authority directly, and (d) harmonize customs procedures with relevant international standards and best practices.  
3.53.  Article 4.8 concerns co-operation and capacity building. Article 4.8.4 provides that the 
customs authority of each Party shall assist the other in relation to; (a) the implementation and operation of the provisions of this Agreement governing importation or exportation, including 
claims for preferential tariff treatment and proc edures for claiming such, (b) the implementation 
and operation of the WTO Agreement on Customs Va luation, (c) enforcement of prohibitions and 
restrictions on export to and imports from their respective territories, (d) joint efforts to combat 
customs fraud, and (e) promote co-operation in any other areas as may be mutually agreed upon 
by the Parties.  
3.54.  Article 4.9 sets out modalities for th e exchange of information between the customs 
authorities of the other Party that would help to facilitate the application and enforcement of 
customs laws. Article 4.9.3 sets out the form for customs authorities to request information. 
Article 4.10 requires the customs authorities of a Party to provide information requested by the 
other Party relating to whether goods have been lawfully (a) exported or (b) imported into the 
territory of the other Party. Article 4.11 requires that each Party permit appeals against decisions 
taken by the customs authority of the Party.  
3.55.  Article 4.12 (on advance rulings) exhorts the Parties to endeavour to provide for the issuing 
of advance written customs rulings. Article 4.13 (on temporary admission and conditional entry of 
goods) provides in Article 4.13.2 that each Party shall facilitate the procedures for the temporary admission of goods in accordance with the Cu stoms Convention on A.T.A. Carnet for the 
Temporary Admission of Goods. Article 4.13.4 also exhorts the Parties to promote the use of the 
A.T.A. Carnet. Article 4.13.4 requires the Parties to  facilitate customs clearance of goods in transit 
from or to the territory of the other Party in accordance with Article V.3 of the GATT 1994.  
3.4.6  Other regulations 
3.56.  Article 2.6 provides that for the purposes of determining the customs value of goods, Part I 
of the WTO Customs Valuation Agreement shall apply mutatis mutandis .  
3.57.  Article 2.7 on administrative fees and formalities reaffirms the Parties obligations under 
Article VIII.1 of the GATT 1994. 
4  PROVISIONS ON TRADE IN SERVICES AND INVESTMENT 4.1  Scope and definitions 4.1.  Article 8.1 of the Agreement defines the scope and coverage of the Chapter 8 on Services. 
Article 8.1.2 provides that the Chapter does not ap ply to (a) a service supplied in the exercise of 
governmental authority, (b) a juridical or natural person who is not a juridical or natural person of the other Party, (c) measures with respect to government procurement
6, (d) subsidies or grants 
                                               
6 The exclusion in Article 8.1.2(c) is broader than the scope of Article XIII of the GATS, which provides 
that Articles II, XVI and XVII of the GATS do not appl y to procurement of services  by government agencies 
purchased for governme ntal purposes.   WT/COMTD/RTA/5/1 
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  provided by a Party, (e) cabotage in maritime services7, and (f) measures affecting natural 
persons seeking access to the employment market of a Party, nor measures regarding citizenship, 
residence or employment on a permanent basis.  
4.2.  Article 8.1.3 mirrors the Annex on Air Transp ort Services and provides that the Chapter will 
also not apply to measures affecting air traffic rights, or services directly related to the exercise of 
air traffic rights, except measures affecting: (a) aircraft repair and maintenance services, (b) the selling and marketing of air transport services, an d (c) computer reservation services. Article 8.1.5 
provides that "new services" will be considered for inclusion in the Chapter at future reviews 
conducted under Article 8.8 of the Agreement. A ccording to the Parties "New Services" means new 
types of services not yet known; which could also include services, although known, not technically or technologically feasible to add to commitments at the time the Agreement was signed. 
4.3.  Article 8.2 sets out the definitions used in the Chapter. Trade in services is defined in 
paragraph 8.2(u) and mirrors the definitions set out in Article I.2 (a)-(d) and Article XXVIII of the GATS, with additional definitions of terms in  Article 8.2 such as cooperative, licensing 
requirements, qualification requirements, qualification procedures and technical standards which 
are not defined under the GATS.  
4.4.  Chapter 10, Articles 10.1-10.20 concern investment. Article 10.1.1 provides that the Chapter 
applies to measures adopted or maintained by a Party relating to investors of the other Party and 
investments of investors of the other Party in the territory of the former Party. It does not apply to (a) any taxation measure (except under Article 10.8 and as otherwise provided), (b) to government procurement, (c) subsidies or grants provided by a Party, and (d) services supplied in 
the exercise of governmental authority by the relevant body or authority of a Party.
8  
4.5.  Article 10.2 concerns definitions used in Chapter 10 on investment. Article 10.3 describes the 
relation of Chapter 10 on investment to  other Chapters of the Agreement.  
4.6.  Article 10.3.1 excludes services and the movement of natural persons from coverage of 
Chapter 10. Article 10.3.2 notes that Article 10.5 (Minimum standard of treatment), 10.6 (Compensation for losses) 10.7 (Expropriation and compensation) 10.8 (Transfers) and 10.9 
(Subrogation), 10.14 (The settlement of investment disputes between a Party and an investor of 
the other Party) shall apply mutatis mutandis  to any measure affecting the supply of a service by a 
service supplier of a Party through commercial presence in the territory of the other Party 
(pursuant to Chapter 8), but only to the extent that they relate to an investment and an obligation 
under Chapter 10, regardless of whether such a service sector is scheduled in a Party's Schedule 
of Specific Commitments pursuant to Article 8.6.  
4.2  Denial of benefits 
4.7.  On services, Article 8.16 concerns denial of benefits, and is broadly similar to Article XXVII of 
the GATS. Subject to prior notification and cons ultation, Article 8.16.1 permits a Party to deny 
benefits under the Chapter (a) to the supply of a service, if that Party determines that the service 
is supplied from or in the territory of a country that is not a Party to the Agreement, (b) in the 
case of a maritime transport service, if it establishes that the service is supplied (i) by a vessel registered under the laws of a non-Party, and (ii) is operated by a person which is of a non-Party, (c) to the supply of a service from or in the territory of the other Party, if the Party establishes 
that the service is supplied by a supplier that is owned or controlled by a person of a non-Party 
and the denying Party (i) does not maintain diplomatic relations with the non-Party or (ii) adopts or maintains measures against the non-Party that prohibit transactions with the juridical person, or 
through other forms of commercial presence that would be violated or circumvented if the benefits 
of the Chapter were accorded to the juridical pe rson or other forms of commercial presence.  
4.8.  On investment, Article 10.10.1 permits a Party to deny the benefits of the Chapter to an 
investor of the other Party that is an enterprise of the other Party and to an investment of such 
                                               
7 Cabotage in maritime services is not ex cluded from the coverage of the GATS.   
8 Article 10.1.2(d) provides that "… a service supplied in the exercise of governmental authority means 
any service, which is supplied neither on a commercial basis nor in competition with one or more services suppliers." WT/COMTD/RTA/5/1 
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  investor if an investor of a non-Party actually owns or controls the enterprise, and the denying 
Party (a) does not maintain diplomatic relations with the non-Party or (b) adopts or maintains 
measures with respect to the non-Party what prohibits transactions with the enterprise that would be violated or circumvented if the benefits of th e Chapter were accorded to the enterprise or its 
investments. Article 10.10.2 permits, subject to prior notification, a Party to deny benefits under 
the Chapter that is an enterprise of the other Pa rty and investments of that enterprise, where the 
denying Party establishes that (a) the enterprise has no substantial business activities in the 
territory of the other Party and (b) the enterprise is owned or controlled by investors of a 
non-Party or of the denying Party.  
4.3  General provisions on trade in services 4.3.1  Market access 
4.9.  Article 8.3 concerns market access. It mirrors Article XVI.1 and 2 of the GATS and its 
footnotes. Article 8.3.1 provides that in resp ect of market access through the modes of supply 
defined in paragraph (u) of Article 8.2, each Party shall accord services and service suppliers of the 
other Party treatment no less favourable than that provided for in the Schedule of Specific 
Commitments (Annex 8-1 of the Agreement). Article 8.5 provides that the Parties may negotiate additional commitments with respect to measures affecting trade in services not subject to 
scheduling under Articles 8.3 or 8.4 (National treatment), including those regarding qualifications, 
standards or licensing. Any such commitments shall be inscribed in a Party's Schedule of Specific Commitments.  
4.3.2  National treatment and MFN 
4.10.  Article 8.4 concerns national treatment. Article 8.4.1 mirrors Article XVII of the GATS, and 
provides that a Party shall accord to services an d service suppliers of the other Party treatment no 
less favourable than that it accords to its own like services and suppliers. Article 8.4.2 provides 
that a Party may meet the requirement of para graph 1 by according to services or service 
suppliers of the other Party either formally identical treatment or formally different treatment to that it accords its own like services and service suppliers. Article 8.4.2 provides that formally 
identical or different treatment shall be considered to be less favourable if it modifies the 
conditions of competition in favour of services or service suppliers of a Party compared to like services of the other Party.  
4.11.  On investment, Article 10.4 concerns national treatment. Article 10.4.1 requires that each 
Party accord to investors of the other Party and to their investments treatment no less favourable 
than it accords in like circumstances to its own investors and their investments in relation to establishment, acquisition, sale, transfer or other disposition of their investments. Article 10.4.2 
states that the treatment accorded under Article 10.4.1, in relation to a regional or local 
government, means treatment no less favourable than the most favoured treatment accorded, in like circumstances at that regional or local government to investors and investments of the Party 
to which it forms a part.  
4.12.  Article 10.11.1 provides that nothing in Ar ticle 10.4 (national treatment) shall be construed 
to prevent a Party from adopting or maintaining a measure that requires special formalities in connection with investments, including a requirement that investments be legally constituted 
under the laws of the Party (provided that such  requirements do not substantially impair the 
benefits of any of the provisions of the Chapte r. Article 10.11.2 provides that notwithstanding 
Article 10.4, a Party may require an investor of the other Party or its investment, to provide 
information concerning that investment for informational or statistical purposes.  
4.3.3  Movement of natural persons 4.13.  Chapter 9 of the Agreement concerns the movement of natural persons. Article 9.1 provides 
that the objectives of the Chapter (a) to provide for rights and obligations additional to those set 
out in Chapter 8 (Services) and 10 (Investment) in relation to the movement of natural persons between the Parties, (b) to facilitate the movement of natural persons engaged in the conduct of trade in services, goods and investment between the Parties, (c) to establish simplified WT/COMTD/RTA/5/1 
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  streamlined and transparent procedures for immigration formalities for the temporary entry of 
natural persons.  
4.14.  Malaysia and India's horizontal commitments (market access) under the GATS included 
definitions of categories of natural persons covered by its commitments. Those horizontal 
provisions also set limits for entry and stay of 5 years for all except business visitors not based in 
Malaysia. These definitions have been subsequently replaced by the definitions contained in Article 9.3 (business visitors) as well as the language contained in Annex 9-1 (intra corporate transferees, 
installer and servicer, contractual service providers and independent professionals. Under the 
Agreement, Malaysia's previous numerical limi tation of only 2 specialists or experts per 
organization has been removed. Both Malaysia and India's horizontal commitments (market access) describe the sectors in which contractua l service providers and independent professionals 
may operate.  
4.15.  Article 9.2 concerns the scope of the Chapter and provides that the Chapter applies to 
measures affecting the temporary movement of the following exclusive list of categories of natural 
persons from one Party to another
9: (a) business visitor, (b) intra-corporate transferee, 
(c) installer and servicer, (d) contractual service supplier and (e) independent professional. Article 9.2.3 provides that nothing in the Chapter shall prevent the Parties from applying measures 
to regulate temporary entry of natural persons of the other Party, including measures necessary to 
protect the integrity of its territory, provided such measures are not applied in a manner the impairs the benefits accruing under the Agreement. Visa requirements are not to be regarded as impairing benefits under the Agreement.  
4.16.  Article 9.3 sets out definitions used in the Chapter. Article 9.3(e)(i) and (ii) provide different 
definitions of the term "intra-corporate transf eree" for Malaysia and for India, for example 
Malaysia's definition applies only to services whereas the definition for India includes investment.  
4.17.  Article 9.4 concerns the grant of temporar y entry. Article 9.4.1 provides that each Party 
shall grant temporary entry or extension of temporary stay to natural persons of the other Party, provided that such persons are qualified for entr y under applicable measures relating to public 
health and safety and national security. It also provides that the conditions governing temporary 
entry of natural persons are set out in Annex 9-1 to the Agreement. Article 9.4.2 provides that any fees imposed in respect of the processing of such applications shall be reasonable and in accordance with applicable legislation.  
4.18.  Annex 9-1 to the Agreement sets out the periods under which a natural person may remain 
in the territory of a Party (see Tables 4.1 and 4.2 below).  
Table 4.1: Malaysia - length of stay for natural persons
10 
Category Migratory Condition Length of Stay 
Business Visitor  Business (Article 9.3) (See also 
conditions listed in Annex 9-1) 30 days temporary entry, which may be 
extended to maximum stay of 90 days.  
Intra Corporate 
Transferee  Intra company transferees (see also 
conditions listed in Annex 9-1) U p  t o  2  y e a r s ,  w h i c h  m a y  b e  e x t e n d e d  i n  
blocs of 2 years up to a maximum of 
10 years for senior manager and five years 
for specialists or experts 
Installer and servicer Professional services (see also 
conditions listed in Annex 9-1) 3  m o n t h s  o r  t h e  d u r a t i o n  o f  c o n t r a c t  -  
whichever is less. Extension possible for another single 3 month period 
Contractual Service 
Suppliers Contract service suppliers (see also 
conditions listed in Annex 9-1) Up to one year, or the duration of contract - 
whichever is less.  
Independent professional Natural person supplying services (see 
also conditions listed in Annex 9-1) Up to one year, or the duration of contract - 
whichever is less.  
 Source: The Agreement. 
                                               
9 In comparison to the GATS Annex on the Movement  of Natural Persons Supplying Services under the 
Agreement which applies to measures  affecting natural persons who are service suppliers of a Member, and 
natural persons of a Member who are employed by a serv ice supplier of a Member in respect of supply of a 
service and does not contain an exclusive li st of categories of  natural persons.  
10 The Parties Schedules of Specific Commitments on Services also contain provisions on natural persons 
in their respective Horizo ntal Limitations sections. WT/COMTD/RTA/5/1 
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  Table 4.2 India - length of stay for natural persons 
Category Migratory Condition Length of Stay 
Business Visitor  Business (Article 9.3) (see also 
conditions listed in Annex 9-1) Up to 180 days entry, multiple entry visa 
of 2 years validity30 days temporary entry, which may be extended to maximum stay of 90 days.  
Intra Corporate 
Transferee  Intra company transferees (see also 
conditions listed in Annex 9-1) On year to year basis, up to a maximum 
of 5 years.  
Installer and servicer Professional services (see also 
conditions listed in Annex 9-1) 3 months or the duration of contract - 
whichever is less.  
Contractual Service 
Suppliers Contract service suppliers (see also 
conditions listed in Annex 9-1) Up to one year, or the duration of 
contract - whichever is less.  
Independent professional Natural person supplying services (see 
also conditions listed in Annex 9-1) Up to one year, or the duration of 
contract - whichever is less.  
 Source: The Agreement. 
 
4.19.  Article 9.5 (Spouses and dependents) provides that natural persons of a Party granted the 
right to long-term temporary entry with the right to bring in their spouses and dependants shall 
(upon complying with applicable legislation) receive the right to work in respect of their spouse and dependants. 
4.20.  Article 9.6 on regulatory transparency, provides in Article 9.6.1 that each Party shall make 
publicly available explanatory material on relevant visa formalities in relation to the Chapter. Article 9.6.2 requires each Party to maintain or establish contact points to respond to inquiries 
concerning temporary entry from interested persons. The contact points shall be authorized to 
permit business persons to report and seek clarifications, including on any special difficulties encountered in the process of seeking temporary entry. Article 9.7.1 requires that requests for temporary entry of natural persons shall be processed expeditiously, including requests for further 
extension of visas and permits. Article 9.7.2 requ ires each Party to provide without undue delay 
information concerning the status of such an application. An applicant shall be notified either directly or through the prospective employer of the final determination of the application. In the 
case of an incomplete application the applicant shall be notified of all the additional information 
required to complete the application. In the case of termination or denial of an application, Article 9.7.3 requires that to the extent possible, the applicant shall be notified in writing by the 
refusing Party, including the reasons therefor. Article 9.8 permits the Parties to request a 
consultation with the other Party regarding any matter under the Chapter, and the other Party shall give sympathetic consideration to the request and endeavour to favourably resolve any specific or general problems arising therefrom. Th e procedural requirements set out in Articles 9.6 
and 9.7 are more specific and substantive than the obligations contained in the GATS.  
4.21.  Article 9.9 on dispute settlement imposes additional limitations vis-a-vis  the GATS on the 
right of a Party to use the dispute settlement prov isions of Chapter 14. It provides that a Party 
may not initiate dispute settlement proceedings regarding a refusal to grant temporary entry 
under this Chapter, unless (a) the matter involves a breach of any of the provisions relating to the grant of temporary entry accruing under this Chapter, (b) the matter involves a pattern of 
practice, and (c) that Party's natural persons affe cted by the pattern of practice have exhausted 
domestic administrative remedies.  
4.22.  Article 9.10 notes that the commitments made by each Party under this Chapter shall be 
subject to any terms, conditions, reservations and limitations contained in each Party's (Services) 
Schedule of Specific Commitments under Chapter 8 of the Agreement (Annex 8-1 of the 
Agreement). Article 9.11 provides that the Sub-Co mmittee on Trade in Services established under 
Article 15.2 shall consider matters relating to implementation of the Chapter.  
4.3.4  Other measures on investment 
4.23.  Article 10.5 concerns minimum standard of treatment for investments. Article 10.5.1 
requires each Party to accord to investments fair and equitable treatment and full protection and 
security. Article 10.6 concerns compensation for losses. It provides that each Party shall accord to 
investors of the other Party (that have suffered loss or damage to their investments in the territory of the other Party due to armed conflict, state of emergency, revolution, insurrection, civil WT/COMTD/RTA/5/1 
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  disturbance or any other similar event) restitution, indemnification, compensation or any other 
settlement that is no less favourable than that which it accords to its own investors or other 
investors of a non-Party - whichever is more favourable to the investors of the other Party.  
4.24.  Article 10.7 concerns expropriation and compensation of investments. Annex 10-1 describes 
circumstances in which indirect expropriation takes place (Article 10.7.8). Annex 10-1 of the 
Agreement concerns Indirect Expropriation. Article 10.7.111 on expropriation and compensation 
provides that a Party shall not expropriate or nationalise an investment either directly or indirectly 
except (a) for a public purpose, (b) in a non-discriminatory manner, (c) on payment of prompt, 
adequate and effective compensation, and (d) in accordance with due process of law. Pursuant to Article 10.7.2, compensation shall (a) be paid without delay, (b) be equivalent to the fair market value of the expropriated investment (c) not re flect any change in value because the intended 
expropriation had become known earlier, (d) be effectively realisable and freely transferable in 
freely usable currency. Article 10.7.5 provides that an investor shall have a right of access to the courts of justice or administrative tribunals to seek review of the expropriate measure of the value 
of the payable compensation.  
4.25.  Article 10.7.6 notes that Article 10.7 does not apply to the issuance of compulsory licences 
in relation to intellectual property rights in accordance with the WTO Agreement on Trade Related 
Intellectual Property Rights.  
4.26.  Article 10.8, on transfers, provides in Article 10.8.1 that each Party shall allow all transfers 
relating to an investment to be made freely and without delay. Article 10.8.2 requires that each Party shall allow such transfers to be made in a freely usable currency at the market rate of 
exchange prevailing at the time of transfer. Ar ticle 10.8.3 provides that a Party may prevent or 
delay a transfer through the equitable, non-discriminatory and good faith application of its laws and regulations relating to (a) bankruptcy, insolven cy or the protection of creditors, (b) issuing, 
trading or dealing in securities, futures, options or derivatives, (c) criminal or penal offences and 
the recovery of proceeds of crime, (d) financia l reporting or record keeping to assist law 
enforcement or financial regulatory authorities, (e ) ensuring compliance with orders or judgements 
in judicial or administrative proceedings or ruli ngs, (f) taxation and (g) social security, public 
retirement or statutory savings schemes, incl uding provident funds, retirement gratuity 
programmes and employees insurance programmes. Ar ticle 10.8.4 provides that nothing in the 
Chapter shall be regarded as altering the rights and obligations of the Parties as party to the 
Articles of Agreement of the International Monetary Fund.  
4.27.  The Parties obligations on Chapter 10 are expressly subject to reservations which are 
required to be specified by both Parties in Annex 10-2 to the Agreement. Article 10.12, 
(on reservations) notes that Article 10.4 (national treatment) will not apply to (a) any existing 
non-conforming measure maintained by a Party at (i) the central and regional level of government, as set out by that Party in its Schedule to Annex 10-2 or (ii) a local level of government, (b) the 
continuation of any non-conforming measure referred to in Article 10.12.1(a), or (c) an 
amendment to any non-conforming measure scheduled in Annex 10-2, provided that the amendment does not decrease the level of conformi ty of the measure. According to the Parties, 
Annexes 10.2 and 10.3 were not completed at the time of signing of the Agreement. The 
preparation of the Annexes is a work-in-progress and is covered in Article 10.17 (Work 
Programme). 
4.28.  Article 10.12.2 provides that Article 10.4 (national treatment (on investment)) shall not 
apply to any measure set out in each Party's Schedule of reservations in Annex 10-3 to the 
Agreement. Annex 10.12.3 provides that neither Party to the Agreement may, under any measure adopted after entry into force of the Agreement, require any investor of the other Party by reason 
of nationality to sell or otherwise dispose of an investment existing at the time of the entry into 
force of the measure. Article 10.12.4 reserves each Party's right to make future reservations on measures that do not conform with Article 10.4 (national treatment) on new and emerging sectors, sub-sectors, industries, products or activities.  
4.29.  Article 10.13 concerns the review of Scheduled reservations on investment. Article 10.13.1 
requires a Party that enters into an agreement on investment with a non-party to give 
                                               
11 See also Annex 10-1 on Indirect Expropriat ion, discussed below in  this section.   WT/COMTD/RTA/5/1 
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  consideration to a request by the other Party to incorporate no-less favourable treatment arising in 
the other agreement into the Agreement. Annexes 10.2 and 10.3 were not completed at the time 
of signing of the Agreement. As noted above, the preparation of the Annexes is a work in progress 
and is covered in Article 10.17 (Work Programme). 
4.30.  Article 10.13.2 requires that as part of th e general review of the operation of the Agreement 
required by Article 16.9, the Parties shall review  their Schedules of Reservations in Annexes 10-2 
and 10-3 with a view to decreasing the reservations and reducing the terms, limitations, conditions 
and qualifications on national treatment. Articl e 10.13.3 permits a Party to request the other Party 
to review its reservations under the Chapter. Article 10.13.4 provides that any incorporation or review under the Article should maintain the ov erall balance of commitments undertaken by each 
Party under the Agreement.  
4.31.  Article 10.14 describes the modalities for the settlement of investment disputes between a 
Party and an investor of the other Party. Article 10. 15 provides that if the legislation of a Party or 
its international obligations result in a position entitling investments by investors of the other Party 
to treatment more favourable than is provided under the Agreement, such position shall not be 
affected by the Agreement. Article 10.20 provides that the Chapter shall not prevent a Party or its 
regulatory bodies adopting, maintaining or enforcing any measure on a non-discriminatory basis, 
or its judicial bodies from taking any measures consistent with the Chapter that is in the public 
interest, including measures to meet health, safety or environmental concerns. 
4.32.  Annex 10-1 provides in paragraph 1 that an action or series of actions by a Party cannot 
constitute an expropriation unless it interferes with a tangible or intangible property right or 
property interest in an investment.  
4.33.  Paragraph 2 of Annex 10-1 inserts provisions relating to the interpretation and application of 
Article 10-7.1 of the Agreement. It provides that Article 10.7.1 addresses two situations (a) "direct 
expropriation" where an investment is nationalized or otherwise directly expropriated through 
formal transfer of title or outright seizure and (b) "indirect expropriation" wh ere an action or series 
of actions by a Party has an effect equivalent do direct expropriation, without formal transfer of 
title or outright seizure. Paragraph 3 of Annex 10-1 provides that determining whether indirect 
expropriation has occurred requires a case-by-case fact based inquiry that considers, among other factors, (a) the economic impact of the government action (although the fact that an action has an adverse economic impact does not of itself establish expropriation), (b) the extent that the action 
interferes with the distinct, reasonable investment-backed expectations, (c) whether the 
government action breaches the government's prior binding written commitment to the investor whether by contract, licence or other legal document, and (d) the character of the government 
action, including the objective of the action and whether the action is disproportionate to the 
objective. Paragraph 4 provides that non-discriminatory regulatory actions, as well as decisions of judicial bodies that are designed and applied to achieve legitimate public welfare objectives (such 
as public health, safety and environment) will not constitute indirect expropriation as referred to in 
paragraph 2(b) of Annex 10-1. 
4.4  Liberalization commitments 4.34.  Article 8.6 provides that each Party shall set out in a Schedule the specific commitments it 
undertakes under Articles 8.3 (market access), 8.4 (National treatment) and 8.5 (Additional 
Commitments). It requires that the Schedules shall specify (a) terms, limitations and conditions on 
market access, (b) conditions and qualifications on national treatment, (c) undertakings relating to 
additional commitments, (d) the time-frame for im plementation of such commitments, and (e) the 
date of entry into force of such commitments. The Schedules of Specific Commitments on Services of the Parties are found in Annex 8-1 to the Agreement, and per Article 8.4 form part of the 
Agreement. There are no schedules of reservations in respect of Annex 8-1.  
4.35.  Article 8.5 of the Agreement permits the Parties to negotiate commitments with respect to 
measures affecting trade in services not subject to scheduling under Articles 8.3 (market access) or 8.4 (national treatment), including those regarding qualifications, standards or licensing 
matters. Article 8.5 requires that any such commitments shall be inscribed in a Party's Schedule of 
commitments.  WT/COMTD/RTA/5/1 
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  4.36.  Article 8.7.1 permits the Parties to modify or withdraw any commitment in its Schedule of 
Specific Commitments under Annex 8-1, at any time starting from 3 years after the date of entry 
into force of such a commitment. Pursuant to Arti cle 8.8, the Parties shall review commitments on 
trade in services with the first review taking place within 5 years of the entry into force of the 
Agreement. The review shall ensure due respect for the national policy objectives and the level of 
development of the Parties, both overall and in individual sectors.  
4.4.1  Malaysia 
4.37.  Malaysia's horizontal commitments (market access) contain some improvements in 
comparison to its commitments under the GATS, such as the raised threshold for investment screening (increased to RM10 million, up from  RM5 million in its GATS Schedule).  
4.38.  Malaysia's liberalization commitments under the Agreement closely shadow its commitments 
under the GATS (see Table 4.3 below), albeit with the absence of one major sector included in its 
GATS Schedule (Financial Services). Many of the improvements noted in Table 4.3 concern the 
reduction or elimination of maximum equity participation in juridical persons.  
4.39.  Under Business Services, in accounting, auditing and bookkeeping services Malaysia has 
improved its commitment in comparison with th e GATS by increasing the maximum "aggregate 
foreign interests" from 30% to 49% in mode 3. In Taxation services the limit has been raised from 
30% under the GATS to 40% in mode 3. In Architectural services Malaysia's commitments in mode 
3 under the Agreement have eliminated the 30% aggregate foreign interest limit.  
4.40.  In Computer and related services, Malaysia's commitments in mode 3 under the Agreement 
have eliminated the 30% aggregate foreign invest ment limit (under the GATS). In Research and 
development, Malaysia's commitments in mode 3 under the Agreement have increased the 30% 
aggregate foreign interest limit to 51%. In Rental/Leasing services, Malaysia has added leasing or rental services concerning other machinery and equipment without operator (CPC 83109) and 
Leasing or rental services concerning personal and household goods (CPC 832). Malaysia has 
raised equity limitations in other business services to 51% from 30%, and has added sub-sectors on management consulting in compar ison with its GATS commitments.  
4.41.  In Communication Services, Malaysia has improved its commitments under 
Telecommunication Services and Audio-visual, where its commitments in mode 3 under the 
Agreement have raised the 30% foreign equity limit (under the GATS) to 49%. Similarly under market access in Construction and Related Engineering services, under mode 3, Malaysia has 
raised the equity limit to 49% from 30% under the GATS.  
4.42.  In Distribution Services Malaysia has undertaken commitments under the Agreement (in 
comparison to its lack of commitments in the sector under the GATS) with modes one and two 
bound as "none" in respect of market access and national treatment. Mode 3 on market access is 
subject to a foreign equity limit of 49%, with "none" for mode 3 on national treatment. In 
comparison to no commitments in the sector in its GATS Schedule, Malaysia has undertaken 
commitments on Environmental Services covering  wastewater removal (private sector only), 
cleaning service of exhaust gases (industrial and private sector only), noise abatement services 
(private sector only) and nature and landscape protection services (only private sector). Malaysia's mode 3 commitments in those sectors are subject to a 49% foreign equity limit.  
4.43.  In Financial services, in comparison to its broad commitments under the GATS in respect of 
Financial Services, Malaysia has undertaken no commitments, resulting in a GATS-minus set of commitments.
12  
4.44.  In respect of Health related and social services, Malaysia has raised foreign equity limits on 
mode 3 from 30% under the GATS to 49% and removed the economic needs test. In Tourism and travel related services, for Hotels and restaurants Malaysia's commitments under the Agreement 
have raised the equity limit on mode 3 from 30% to 51% and removed a licensing requirement in 
comparison with its GATS commitments.  
                                               
12 Note: Article 8.17 of the Agreem ent provides (in full): "The Part ies reaffirm their rights and 
obligations with respect to each other unde r the GATS Annex on Financial Services". WT/COMTD/RTA/5/1 
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  Table 4.3 Malaysia: comparison between the GATS and the Agreement specific 
commitments in trade in services (excluding mode 4)  
Sectors GATS RTA 
1. BUSINESS SERVICES √ √ 
A. Professional services √ Improved 
B. Computer and related services  √ Improved 
C. Research and development √ Improved 
D. Real estate √ - 
E. Rental/Leasing serv ices without operators - Improved 
F. Other √ √ 
2. COMMUNICATION SERVICES √ Improved 
A. Postal - - 
B. Courier - - 
C. Telecommunication  √ Improved 
D. Audiovisual √ √ 
E. Other - - 
3. CONSTRUCTION AND RELATED ENGINEERING 
 SERVICES √ Improved 
4. DISTRIBUTION SERVICES - √ 
5. EDUCATION SERVICES - - 
6. ENVIRONMENTAL SERVICES - √ 
7. FINANCIAL SERVICES √ - 
A. All insurance and insu rance-related services √ - 
B. Banking and other financial services √ - 
8. HEALTH RELATED AND SOCIAL SERVICES √ Improved 
9. TOURISM AND TRAVEL RELATED SERVICES √ Improved 
A. Hotels an d restaurants √ Improved 
B. Travel agencies and tour operators √ Similar 
C. Tourist guides - - 
D. Other - - 
10. RECREATIONAL, CULTURAL AND SPORTING 
 SERVICES √ √ 
11. TRANSPORT SERVICES - √ 
A. Maritime √ √ 
B. Internal waterways - - 
C. Air  - √ 
D. Space - - 
E. Rail  - - 
F. Road - - 
G. Pipeline - - 
H. Services auxiliary to all modes of transport - - 
I. Other - - 
12. OTHER SERVICES NOT INCLUDED ELSEWHERE √ √ 
 
Note: 
√:  Commitments in the GATS schedule (with or without limitations). 
-:  No commitments. New:  New commitments made under the Agreement (with or without limitations).  Improved: Overall improved commitm ents made under the Agreement compared to those under the GATS. 
Similar:  Similar commitments made under the Agreement as those under the GATS. *  See also description in relevant paragraph. **  Maritime transport only.  Source:   Draft Consolidat e d GATS Sch e dul e  of Spec i fi c  Commi tme n ts  ( S/ D CS/W/ MYS),  pre pare d by t h e 
Secretariat (in 2003), and relevant section of Annex 4 to the Agreement. The comparison only concerns modes 1-3, market access, national treatment, and additional commitments; it does not concern commitments under mode 4. WT/COMTD/RTA/5/1 
WT/REG329/1 
 
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  4.4.2  India 
4.45.  India's liberalization commitments also closely shadow its commitments under the GATS, 
albeit with additional commitments in a number of  sectors, and the absence of one major sector 
for which it has commitments under the GATS (Financial Services). In its horizontal commitments, 
under market access, mode 3 India has added the right to apply government policy on foreign and 
direct investment from time to time and subject to the relevant sectoral commitments contained in the Annex 8-1 Schedule. In a related restriction, although not set out in the horizontal section, and 
not included in India's GATS Schedule, many sectors and sub-sectors have a new restriction in the 
form of a requirement that investment in a sector is expressly subject to Foreign Investment Promotion Board ("FIPB") approval. Under Business services, for Professional services and Computer and related services India's commitments under the Agreement range across a greater 
number of sub-sectors and eliminate the 51% equity limitation in mode 3 in comparison to its 
GATS commitments. Under Research and Develo pment, India has increased the sub-sectors 
covered and also raised the foreign equity limit to 70%, up from 51% under the GATS. In 
comparison to its commitments under the GATS, India has undertaken new commitments under 
Real Estate, Rental Leasing and Other services, al though they are subject to FIPB approval and 
also a foreign equity limit of 51%.  
4.46.  In respect of Communication Services, India has undertaken improved commitments in 
Telecommunication Services, with an increase in the foreign equity limit to 51% up from 25%. In 
respect of audio-visual services, India has improved its mode 3 commitments on motion pictures. For Construction Services, the foreign equity limit has been increased to 74%t under India's mode 
3 commitments under the Agreement, as compared to its GATS limit of 51%.  
4.47.  In its Schedule of Commitments India undertook new commitments under Distribution 
Services, on A. Commission agents' services co vering sales on a fee or contract basis for 
agricultural raw materials, food products (excludi ng beverages and tobacco), machinery, industrial 
equipment and vehicles other than motor vehicles, bicycles and motorcycles), furniture household goods hardware and iron mongery textiles clothing and footwear. India also undertook new 
commitments in respect of B. Wholesale trade servic es in respect of the same sub sectors. India's 
commitments remain subject to FIPB approval, and a foreign equity limit of 49% in respect of mode 3 on market access.  
4.48.  India undertook new commitments on Educ ation services, C. Higher Education Services 
under the Agreement. In respect of mode 3 market access, the commitments are subject to a 
foreign equity limit of 51% and limitations on the fees imposable for the service. FIPB approval is 
also required. 
4.49.  India also undertook new commitments on Environmental Services on B. Refuse Disposal 
services and C. Sanitation and Similar Services in comparison to its GATS commitments. In its commitments under the Agreement, there are no re strictions on modes 1 and 2 on market access 
or national treatment, but mode 3 on market access  is subject to a foreign equity limit of 49% and 
FIPB approval.  
4.50.  As noted above, like Malaysia, India has not undertaken commitments under the Agreement 
in Financial Services, despite its wide ranging commitments under the GATS, resulting in a 
GATS-minus outcome for the sector under the Agreement.
13  
4.51.  India undertook new commitments in Recr eational, cultural and sporting services, A. 
Entertainment Services and D. Sporting and other Recreational Services; both are subject to FIPB 
approval on mode 3 market access.  
4.52.  Under Transport services India undertook new commitments on A. Maritime transport 
services. The commitments contain a headnote noting that all commitments are subject to 
domestic laws, entry requirements, rules and regulations and the terms and conditions of the 
Directorate General of Shipping, Reserve Bank of India and any other competent authority in 
                                               
13 Despite the absence of commitments in the Agre ement on Financial Services for both Parties, 
Article 8.17 of the Agreement provides (in full):  "The Pa rties reaffirm their rights and obligations with respect 
to each other under the GATS Annex on Financial Services".   WT/COMTD/RTA/5/1 
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  India. For supply of Maritime Auxiliary Services through commercial presence, the service must be 
provided by an Indian registered company and al so subject to FIPB approval. India's commitments 
concern 1(a) Liner shipping (access to port facilities are subject to conditions recorded under "Additional Commitments"), (b) Bulk Shipping, (ii)  LNG. All of those commitments are subject to 
the requirement that a company operating an Indian  flagged ship must have its principal place of 
business in India, a 49% foreign equity limit and FIPB approval.  
4.53.  India also undertook commitments in respect of Maritime Auxiliary Services: Maritime cargo 
handling services, Storage and Warehousing Services in Ports, Maritime Agency Services, Maritime 
Freight Forwarding, International rental/charter of vessels with crew or on a bareboat basis, Maintenance and repairs of seagoing vessels and Ship broking. All are expressly subject to the headnote under the section, and also to FIPB approval for mode 3 market access. In addition, 
India has attached definitions related to Maritime Transport services to its Services Schedule under 
the Agreement.  
Table 4.4 India: comparison between the GATS and the Agreement specific 
commitments in trade in services (excluding mode 4)  
Sectors GATS RTA 
1. BUSINESS SERVICES √ √ 
A. Professional services √ Improved 
B. Computer and related services  √ Improved 
C. Research and development √ Improved 
D. Real estate - √ 
E. Rental/Leasing serv ices without operators - √ 
F. Other √ Improved 
2. COMMUNICATION SERVICES √ √ 
A. Postal - - 
B. Courier - - 
C. Telecommunication  √ Improved 
D. Audiovisual √ Similar 
E. Other - - 
3. CONSTRUCTION AND RELATED ENGINEERING 
 SERVICES √ Improved 
4. DISTRIBUTION SERVICES - √ 
5. EDUCATION SERVICES - √ 
6. ENVIRONMENTAL SERVICES - √ 
7. FINANCIAL SERVICES √ - 
A. All insurance and insu rance-related services √ - 
B. Banking and other financial services √ - 
8. HEALTH RELATED AND SOCIAL SERVICES √ Similar 
9. TOURISM AND TRAVEL RELATED SERVICES √ Similar 
A. Hotels an d restaurants √ Similar 
B. Travel agencies and tour operators √ Similar 
C. Tourist guides - - 
D. Other - - 
10. RECREATIONAL, CULTURAL AND SPORTING 
 SERVICES - √ 
11. TRANSPORT SERVICES - √ 
A. Maritime - √ 
B. Internal waterways - - 
C. Air  - - 
D. Space - - 
E. Rail  - - 
F. Road - - 
G. Pipeline - - 
H. Services auxiliary to all modes of transport - - 
I. Other - - 
12. OTHER SERVICES NOT INCLUDED ELSEWHERE - - 
 WT/COMTD/RTA/5/1 
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  Note: 
√: Commitments in the GATS schedule (with or without limitations). 
-: No commitments. New: New commitments made under the Agreement (with or without limitations).  Improved:Overall improved commitmen ts made under the Agreement compared to those under the GATS. 
Similar: Similar commitments made under the Agreement as those under the GATS. * See also description in relevant paragraph. ** Maritime transport only.  Source:  Draft Consol idated GATS Schedule of Specific Commitments (S/DCS/W/IND), prepared by the 
Secretariat (in 2003), and relevant section of Annex 4 to the Agreement. The comparison only concerns modes 1-3, market access, national treatment, and additional commitments; it does not concern commitments under mode 4. 
 
4.5  Regulatory provisions  
4.5.1  Domestic regulation 
4.54.  Article 8.9 concerns domestic regulation, and mirrors Article VI of the GATS. Article 8.9.1 
provides that in sectors where commitments have been undertaken, each Party shall ensure that 
all measures of general application affecting trade in services are administered in a reasonable, 
objective and impartial manner. Article 8.9.2 and 8.9.3 duplicate Article VI.2 of the GATS, and require each Party to maintain or institute judicial, arbitral or administrative tribunals, unless this would be inconsistent with the Party's constitutional or legal structure.  
4.55.  Article 8.9.4 parallels Article VI.3 of the GATS. Article 8.9.4(b) expands upon the last 
sentence of Article VI.3, requiring the Party receiving an incomplete application to identify the additional information required to process the application and provide a timeframe for the 
applicant to remedy any such deficiencies in the application. Article 8.9.4(c) requires the Party 
terminating or denying an application to inform the applicant, to the maximum extent possible and without delay, of the reasons for such action and provide the possibility for the applicant to 
resubmit a new application. Article 8.9.5 provides that with a view to ensuring that domestic 
regulation, including measures relating to qualification requirements, do not constitute unnecessary barriers to trade in services, the Parties shall jointly review the results of negotiations on such measures conducted under Article VI.4 of the GATS, with a view to incorporation into the 
Chapter. The remainder of Article 8.9.5 duplicates the second sentence as well as subparagraphs 
(a)-(c) of Article VI.4 of the GATS.  
4.56.  Article 8.9.6 provides that pending the incorporation of any disciplines pursuant to 
Article 8.9.5, for sectors in respect of which a Party has undertaken specific commitments and 
subject to any terms, limitations or qualifications contained in the commitments of the Party, a Party shall not apply licensing and qualification requirements and procedures and technical 
standards in a manner that nullifies or impairs such specific commitments in a manner inconsistent 
with sub-paragraphs (a)-(c). Those sub-paragraphs duplicate the language of Article VI.5(a)-(b) of the GATS. Article 8.9.7 requires the Parties to  provide adequate procedures to verify the 
competence of professionals of the other Party in ac cordance with the provisions in Article 8.9.6.  
4.5.2  Recognition 
4.57.  Article 8.10 of the Agreement concerns recognition. Article 8.10.1 very closely follows 
Article VII.1 of the GATS and provides that for the purposes of fulfilling its standards for the 
authorization, licensing or certification of services suppliers, each Party shall give consideration to 
requests to recognize the education, experience, licences or certifications granted in the other 
Party. Such recognition shall be based upon an agreement or arrangement with the other Party, or 
granted autonomously. Article 8.10.2 duplicates Arti cle VII.2 of the GATS and provides that when 
an agreement has been concluded pursuant to Arti cle 8.10.1, the Party which is party to such an 
agreement shall afford the other Party adequate opportunity to negotiate its accession to the agreement or to negotiate a comparable agreement or arrangement with it. If recognition is 
accorded autonomously it shall afford adequate opportunity to the other Party to demonstrate that 
the education, experience, licences or certifications should also be recognized.  WT/COMTD/RTA/5/1 
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  4.58.  Article 8.10.3 of the Agreement provides that the Parties shall encourage their relevant 
authorities or professional bodies in services se ctors such as accounting, auditing, architecture, 
medical doctors, dental and nursing to negotiate, within 12 months of entry into force of the Agreement, (or a reasonable period of time) any such agreement or arrangements providing 
mutual recognition of education, experience, licences or certifications.
14 Article 8.10.4 provides 
that in respect of regulated service sectors other than those mentioned in Article 8.10.3 the Parties shall encourage their respective bodies to negotiate agreements for mutual recognition of 
education, experience, licences or certifications with a view to the achievement of early outcomes. 
4.5.3  Subsidies 4.59.  Article 8.14 concerns subsidies in the services sector. Article 8.14.1 provides that the 
Parties shall review disciplines on subsidies related to trade in services in the light of any 
disciplines agreed under Article XV of GATS, with a view to their incorporation into the Chapter. 
Article 8.14.2 combines the first sentence of Article XV.1 of the GATS, with Article XV.2 of the GATS, any Party which considers it is adversely affected by a subsidy or grant of the other Party 
may request consultations with the other Party and such requests shall be accorded sympathetic 
consideration.  
4.5.4  Safeguards 
4.60.  Article 8.13 concerns safeguard measures in services. In Article 8.13.1 the Parties note that 
multilateral negotiations pursuant to Article X of the GATS on emergency safeguard measures are based on the principles of non-discrimination. Upon the conclusion of such multilateral negotiations the Parties shall conduct a review to discu ss possible amendments to the Agreement. 
Article 8.13.2 provides that if the implementati on of the Agreement causes substantial adverse 
impact to a service sector of a Party before the conclusion of multilateral negotiations under Article X of the GATS, the affected Party may request consultations with the other Party for the purpose 
of discussing any measure with respect to the affected service sector. Any measure taken shall be 
with the approval of both Parties, and shall take  into account the circumstances of the particular 
case.  
4.6  Sector specific provisions on trade in services 
4.6.1  Financial Services 4.61.  In Article 8.17 the Parties reaffirm their ri ghts and obligations with respect to each other 
under the GATS Annex on Financial Services. As noted above, under the GATS the Parties 
undertook obligations in relation to Financial Se rvices, although under the Agreement there are no 
commitments undertaken in relation to Financial Services.  
4.6.2  Telecommunications 
4.62.  Annex 8-2 to the Agreement concerns Telecommunications. Annex 8-2 is not mentioned in 
Chapter 8 on Services nor in the Schedules of Commitments on Services of the Parties. Annex 8-2 is broadly similar to the GATS Annex on Telecommunication Services in scope and coverage.  
4.63.  Annex 8-2 provides in Paragraph 15.1 that in the event of an inconsistency between the 
Annex and other Chapters under the Agreement A nnex 8-2 shall prevail to the extent of the 
inconsistency.  
5  GENERAL PROVISIONS OF THE AGREEMENT 
5.1  Transparency 
5.1.  Chapter 13, Articles 13.1-13.5 concern Transparency. Article 13.2.1 concerns publication and 
provides that each Party shall ensure, wherever possible, that its laws, regulations, procedures and 
                                               
14 Any failure to negotiate such an agreement will not be regarded as a breach of a Party's obligations 
under Article 8.10.3 nor subject to dispute settlement under Chapter 14 of the Agreement. WT/COMTD/RTA/5/1 
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  administrative rulings of general application15 with respect to any matter covered by this 
Agreement are promptly published, and made availabl e in the public domain (including the official 
website) in such a manner as to enable interested persons of the other Party to become acquainted with them. Article 13.2.2 provides th at to the extent possible each Party shall (a) 
publish in advance any such measure that it proposes to adopt, and (b) provide, where 
appropriate, interested persons and parties with a reasonable opportunity to comment on such proposed measures.  
5.2.  Article 13.3 concerns administrative proceedings. It provides that each Party shall ensure (in 
its administrative proceedings applying measures referred to in Article 13.2) that (a) where possible, persons of the other Party are provided reasonable notice when a proceeding is initiated, including a description of the nature of the proc eeding, a statement of the legal authority under 
which the proceeding is initiated, and a general de scription of any issues under question, (b) such 
persons are afforded a reasonable opportunity to present facts and arguments in support of their positions prior to any final administrative action, and (c) its procedures are in accordance with 
domestic law.  
5.3.  Article 13.4 concerns review and appeals. Article 13.4.1 requires each Party to (where 
warranted) establish or maintain judicial, quasi-judicial or administrative tribunals or procedures 
for the purpose of the prompt review and correct ion of final administrative actions regarding 
matters covered by the Agreement, other than measures taken for prudential reasons. Such 
tribunals shall be independent of authority entrusted with administrative enforcement and have no substantial interest in the outcome of the matter.  Article 13.4.2 requires that the parties to any 
proceedings in any such tribunals or procedures are provided with the right to a (a) reasonable 
opportunity to defend their respective positions, and (b) decision based on the evidence and submissions of record.  
5.4.  Article 13.5 on notification and provision of  information. It provides in Article 13.5.1 that 
each Party shall notify the other of any measure that the Party considers might materially affect the operation of this Agreement or otherwise substantially affect the other Party's interests. Under 
Article 13.5.3 upon request of a Party the other Party shall provide information and respond to 
questions pertaining to any measure. Such notifi cation, request or information shall be conveyed 
to the other through the contact point established under Article 15.4 of the Agreement. 
5.2  Current payments and capital movements 
5.5.  Article 8.15 of the Agreement concerns paymen ts and transfers. In Article 8.15.1 it provides 
that except under the circumstances provided in Article 12.4, a Party may not apply restrictions on international transfers and payments for current transactions relating to its specific commitments.  
5.3  Exceptions 
5.6.  Chapter 12, Articles 12.1-12.4 concern Exceptions. Article 12.1.1 provides that for the 
purposes of Chapters 2-10 of this Agreement, Article XX of the GATT 1994 and its interpretative 
notes and Article XIV of GATS (including footnotes) shall apply to the Agreement 
mutatis mutandis . Article 12.1.2 provides that for the purposes of Chapters 2-10 of the 
Agreement, (subject to requirements that any measures are not applied in a manner which would constitute arbitrary or unjustifiable discrimination between the Parties or a disguised restriction on 
trade in goods and services or investment) nothing in the Agreement shall be construed to prevent 
the adoption or enforcement by a Party of measures necessary to protect national treasures of artistic, historic or archaeological value.  
5.7.  Article 12.2
16 concerns security exceptions. It provides that nothing in the Agreement shall 
be construed to (a) to require a Party to furnish or allow access to any information the disclosure of which it determines to be contrary to its essential security interests, (b) to prevent a Party from 
taking any actions it considers necessary for the protection of its essential security interests: 
(i) relating to traffic in arms, ammunition and implements of war, and traffic in goods or materials relating to the supply of services as carried on, directly or indirectly for the purpose of or supplying 
                                               
15 The phrase "administrative ruling of  general application" is defined in  Article 13.1 of the Agreement.   
16 See also Annexes 12-1 "Security Exceptions" and 12-2 "Non-Justiciability of Security Exceptions".  WT/COMTD/RTA/5/1 
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  a military establishment, (ii) taken in time of war or other emergency in international relations, 
(iii) relating to fissionable or fusionable materials or the materials from which they are derived; or 
(iv) relating to protection of critical public infrastructure from deliberate attempts intended to disable or degrade such infrastructure; (c) to prevent a Party from taking any action in pursuance 
of its obligations under the United Nations Charter for the maintenance of international peace and 
security.  
5.8.  Article 12.2.3 provides that for the purp oses of Chapters 8 (Services), 9 (Movement of 
Natural Persons) and 10 (Investment), nothing shall be construed to require a Party to accord the 
benefits of those Chapters to a service supplier or investor that is an enterprise of the other Party 
where a Party adopts or maintains legislative measures which it considers necessary for the protection of its essential security interests with respect to a non-Party or a service supplier or 
investor or a non-Party that would be violated or circumvented if the benefits of those Chapters 
were accorded to the first mentioned service supplier or investor. Article 12.2.4 provides that Article 12.2.3 shall be interpreted in accordance with the provisions of Annex 12-1 on Security 
Exceptions. Article 12.2.4 provides that for th e purposes of Chapter 10 of the Agreement, 
Article 12.2 shall be interpreted in accordance with the provisions of Annex 12-2 on Non-Justiciability of Security Exceptions. Article 12.3.1 (on taxation measures) provides unless 
otherwise provided for in the Agreement, the prov isions of the Agreement shall not apply to any 
taxation measures. Article 12.3.2 provides that no thing in the Agreement shall affect the rights 
and obligations of either Party under any agreement on taxation measures, and in the event of any inconsistency between a provision of the Agreement and an agreement on taxation measures the 
latter agreement shall prevail to the extent of any inconsistency.  
5.9.  Annex 12-1 contains a short description  of the Parties joint understanding on the 
interpretation of Chapter 12, in particular the inte rpretation of paragraph 3 of Article 12.2 (security 
exceptions). Annex 12-2 confirms the Parties understanding that disputes submitted to arbitration 
pursuant to paragraphs 7 and 8 of Article 10.14 (the Settlement of Investment Disputes between a Party and an Investor of the Other Party).  
5.4  Accession and Withdrawal 
5.10.  Article 16.10.1 provides that the Agreement shall remain in force until one Party gives 
written notice of its intention to terminate it. Under Article 16.10.2, either Party may terminate this Agreement by giving one year's advance notice in writing to the other Party. Article 16.10.3 
permits the other Party to request (in writing) consultations concerning any matter that would 
arise from termination of the Agreement within 45 days from receipt of the notice referred to in paragraph 2. There is no provision on accession by third parties.  
5.5  Institutional framework 
5.11.  Chapter 11, Articles 11.1-11.6 concerns Economic Co-operation. Article 11.1.1 provides that 
the Parties agree to establish a framework for co-operation as a means to expand and enhance the 
benefits of the Agreement and to promote capacity building activities in areas of mutual interest. 
Article 11.1.2 provides that the Parties shall establish close co-operation with a view to (a) promoting and enhancing economic co-operation to further development objectives in accordance with the laws and regulations of each Party, (b) complementing existing and building new 
cooperative relationships between the Parties, (c) creating new opportunities for trade and 
investment and promotion of competitiveness and innovation including where appropriate, the private sector, (d) contributing to the role of the private sector in promoting and building strategic 
alliances to encourage mutual economic growth and development (e) encouraging the presence of 
the Parties and their goods and services in each others respective markets, and (f) increasing and deepening co-operation between the Pa rties in areas of mutual interest. 
5.12.  Article 11.2 provides a list of areas of co-operation (to be pursued in the Sub-Committee on 
Economic Co-operation per Article 15 of the Agreement). The list of topics included is 
(a) infrastructure development, (b) human resource development, (c) science and technology, (d) creative industries, (e) tourism, (f) small and medium industries, (g) business facilitation, (h)  
finance and (i) other related areas of co-operation to be mutually agreed by the Parties pursuant 
to Article 1.1 of the Agreement. Article 11.4 provides that the Sub-Committee on Economic 
Development established under Article 15.2 of the Agreement shall be responsible for WT/COMTD/RTA/5/1 
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  implementation of the Chapter. Article 11.6 provides that neither Party may have recourse to 
Chapter 14 (Dispute Settlement) in relation to Chapter 11.  
5.13.  Chapter 15, Articles 15.1-4 concern institutional provisions under the Agreement. 
Article 15.1.1 of the Agreement establishes a Joint Committee, co-Chaired by senior government 
officials of the Parties, or at Ministerial level. The functions and powers of the Committee are set 
out in Article 15.1.2 and 15.1.3 of the Agreement.  Article 15.1.4 provides that the Joint Committee 
shall convene its inaugural meeting within one year  of the entry into force of the Agreement. To 
date, no Joint Committee meeting has been held. 
5.14.  Article 15.2.1 establishes 7 Sub-Committees under the Agreement: (a) Sub-Committee on 
Goods, (b) Sub-Committee on Customs Cooperation, (c) Sub-Committee on Sanitary and Phytosanitary Measures, (d) Sub-Committee on Technical Barriers to Trade, (e) Sub-Committee on 
Trade in Services, (f) Sub-Committee on Investment and (g) Sub-Committee on Economic 
Co-operation; the functions of the Sub-Committees are set out in Articles 15.2.2, 15.2.3, 15.2.4, 
15.2.5, 15.2.6, 15.2.7 and 15.2.8 respectively. Article 15.3 concerns contact points and the 
exchange of information. Nodal points for overall coordination under the Agreement are 
established under Article 15.4.  
5.6  Dispute settlement 
5.15.  Chapter 14, Articles 14.1-14.18 concern the dispute settlement mechanism. Article 14.1 
sets out the scope and coverage of the Chapter.  
5.16.  Article 14.4.1 provides that a Party may request consultations with the other Party 
concerning the interpretation, implementation or application of the Agreement in accordance with 
paragraph 1 of Article 14.1. Per Article 14.4.2, a request for consultations shall be in writing and 
set out the reasons for the request including identification of the measure at issue and an indication of the legal basis for the complaint. The responding Party shall reply to the request 
within 10 days of receipt of such request, and shall enter into consultations within 30 days of 
receipt of the request.  
5.17.  Under Article 14.5.1, if the Parties fail to resolve a matter within 60 days of the delivery of a 
request for consultations under Article 14.4, either Party may refer the matter to the Joint 
Committee by delivering a written notification to the other Party. Article 14.5.2 provides that the Joint Committee shall then meet promptly and endeavour to reach a mutually satisfactory solution to the dispute.  
5.18.  Article 14.6 of the Agreement permits the use of good offices, conciliation and mediation to 
resolve a dispute. Article 14.6.2 provides that the Parties may agree for good offices, conciliation and mediation to continue while the dispute proceeds for resolution by an arbitral tribunal 
established under Article 14.7 of the Agreement.  
5.19.  Article 14.7.1 permits the complaining Party to request in writing the establishment of an 
arbitral tribunal if (a) the Party complained against does not enter into consultations within 
30 days of receipt of the request for such consultations, or there is no referral to the 
Joint Committee, (b) or the Parties fail to resolve the dispute within 60 days of the receipt of request for consultations. Article 14.9 concerns the establishment and composition of an arbitral tribunal, including the experience and qualifications of members and chair of an arbitral tribunal. 
Article 14.10 sets out the rules of procedure for the arbitral tribunal. The functions of an arbitral 
tribunal established under Article 14.9 are described in Article 14.11. Article 14.12.1 provides that the proceedings of an arbitral tribunal may be su spended or terminated upon the agreement of the 
Parties, for a period not exceeding 12 months.  
5.20.  Article 14.14 concerns the issuing of an initia l report to the Parties by the arbitral tribunal. 
Article 14.14.2 requires that an initial report be provided to the Parties within 90 days of its 
composition. Article 14.15.1 requires that the final report of the arbitral tribunal be communicated 
to the Parties within 60 days of the date of issuing the initial report under Article 14.14. The final report is binding upon the Parties pursuant to Article 14.15.3.  WT/COMTD/RTA/5/1 
WT/REG329/1 
 
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  5.21.  Article 14.16 on implementation provides in paragraph 1 that the Party complained against 
shall promptly comply with the award17 of the tribunal. If immediate compliance is not practicable 
the Party complained against shall comply within a reasonable period of time, to be determined by the Parties. If the Parties cannot reach agreement on a reasonable period of time within 45 days of 
the issuance of the final report the arbitral panel may be requested to determine the matter. 
Article l14.16.2 provides that if the Parties cannot agree whether there has been compliance with the award of the tribunal, the matter may be referred to the original arbitral tribunal for 
determination. In such a case the tribunal shall provide its report to the Parties within 60 days 
after the date of referral of the matter to it.  
5.22.  If the Party complained against fails to bring the measure found to be inconsistent into 
conformity with the award of the panel within a re asonable period of time, that Party shall enter 
into consultations (if requested) with a view to reaching agreement on mutually satisfactory 
compensation, per Article 14.17.1. Under Article 14.17.2, if agreement cannot be reached within 20 days the complaining Party may give 30 days advance notice of its intention to suspend the 
benefits or other obligations under the Agreement. Paragraphs 3 and 4 of Article 14.17 describe 
the duration and types of benefits that may be suspended.  
                                               
17 Defined in Article 14.2 of the Agreement. WT/COMTD/RTA/5/1 
WT/REG329/1 
 
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  Chart 5.1 Dispute Settlement Mechanism of the Agreement 
 
 
Source: Chapter 14 of the Agreement. 
 
5.7  Relationship with other agreements concluded by the Parties 
5.23.  Article 16.2 of the Agreement concerns the relationship of the Agreement with other 
agreements. Article 16.2.1 of the Agreement provid es that the Parties affirm their rights and 
obligations with respect to each other under bilateral and multilateral agreements to which both 
Parties are parties, including the WTO Agreemen t. Under Article 16.2.2, in the event of any 
inconsistency between the Agreement and any other agreements to which the Parties are party, the Parties shall immediately consult with each other with a view to reaching a mutually satisfactory solution.  
5.24.  Table 5.1 shows the Parties' participation in other RTAs, notified and non-notified, in force 
as of July 2013. WT/COMTD/RTA/5/1 
WT/REG329/1 
 
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  Table 5.1 India and Malaysia: Participation in other RTAs (notified and non-notified in 
force), as of 9 July 2013  
Partner/ 
Agreement Date of 
entry into 
force Type of 
agreement GATT/WTO Notification 
Year WTO Provision 
INDIA 
Japan 01.08.11 Goods & 
Services 2011 GATT Art. XXIV & GATS Art. V 
ASEAN-India 01.01.10 Goods 2010 Enabling Clause 
Rep. of Korea 
 01.01.10 
 Goods & 
Services 2010 
 GATT Art. XXIV, Enabling 
Clause & GATS Art. V 
Nepal 27.10.09 Goods 2010 Enabling Clause 
MERCOSUR-India 01.06.09 Goods & 
Services 2010 GATT Art. XXIV & GATS Art. V 
Chile 17.08.07 Goods 2009 Enabling Clause 
Bhutan 29.07.06 Goods 2008 Enabling Clause 
SAFTA 01.01.06 Goods 2008 Enabling Clause 
Singapore 01.08.05 Goods & 
Services 2007 GATT Art. XXIV & GATS Art. V 
Afghanistan 13.05.03 Goods 2010 Enabling Clause 
Sri Lanka 15.12.01 Goods 2002 Enabling Clause 
SAPTA 07.12.95 Goods 1997 Enabling Clause 
GSTP 19.04.89 Goods 1989 Enabling Clause 
APTA 17.06.76 Goods 1976 Enabling Clause 
Thailand (Early Harvest) 01.09.04 Goods Not notified 
MALAYSIA 
Australia 01.01.13 Goods & 
Services 2013 GATT Art. XXIV & GATS Art. V 
Chile 25.02.12 Goods 2013 GATT Art. XXIV 
New Zealand 01.08.10 Goods & 
Services 2012 GATT Art. XXIV & GATS Art. V 
ASEAN-Rep. of Korea 01.01.10 
01.05.09 Goods 
Services 2010 GATT Art. XXIV, Enabling 
Clause & GATS Art. V 
ASEAN-Australia-New Zealand 01.01.10 Goods & 
Services 2010 GATT Art. XXIV & GATS Art. V 
ASEAN-India 01.01.10 Goods 2010 Enabling Clause 
ASEAN-Japan 01.12.08 Goods 2009 GATT Art. XXIV 
Pakistan 01.01.08 Goods & 
Services 2008 Enabling Clause & GATS Art. V 
Japan 13.07.06 Goods & 
Services 2006 GATT Art. XXIV & GATS Art. V 
ASEAN-China 01.01.05 
01.07.07 Goods 
Services 2005 
2008 Enabling Clause 
GATS Art. V 
AFTA 28.01.92 Goods 1992 Enabling Clause 
GSTP 19.04.89 Goods 1989 Enabling Clause 
 WT/COMTD/RTA/5/1 
WT/REG329/1 
 
- 40 - 
 
  Source: WTO Secretariat. 
 
AFTA: ASEAN Free Trade Area ASEAN: Association of So utheast Asian Nations 
SAFTA: South Asian Free Trade Agreement SAPTA: South Asian Preferential Trade Arrangement GSTP: Global System of Trade Preferences APTA: Asia Pacific Trade Agreement 
 
5.8  Government procurement 
5.25.  The Agreement contains no specific provisions on Government Procurement.  
5.9  Intellectual property rights 
5.26.  Article 4.8 of the Agreement concerns co-operation and capacity building. Article 4.8.3 
concerns suspension of release of goods from cu stoms clearance. It requires the Parties, in 
accordance with their national legal and administrative provisions in force, to enable a right holder 
who has valid reasons to suspect that the importation of goods infringes upon an intellectual property right to request the customs authorit ies to suspend clearance of such goods.  
5.10  Economic cooperation 
5.27.  Chapter 11 of the Agreement, Articles  11.1-11.6 concern economic co-operation. The 
objectives of the Chapter are set out in Article 11.1. Article 11.2 describes the scope of the Chapter. The Parties affirm the importance of al l forms of co-operation to be identified and 
discussed by the Sub-Committee on Economic Co-opera tion. Areas of co-operation are identified in 
Article 11.2(a)-(i) inclusive. Article 11.2.3 provid es that co-operation between the Parties under 
the Chapter will supplement the co-operation and cooperative activities between the Parties set 
out in the Agreement. Article 11.4 provides th at the Sub-Committee on Economic Co-operation 
established under Article 15.2 (Sub-Committees) shall consider matters relating to the implementation of the Chapter. Article 11.5 se ts out mechanisms for implementation of co-
operation, (a) meetings of the Sub-Committee on Economic Co-operation, (b) meetings as 
required between relevant institutions of the Parties and (c) the use of diplomatic channels to promote dialogue. Article 11.5.2 sets out the responsibilities of the Joint Committee established under Article 15.1 of the Agreement with regard to economic co-operation. Article 11.6 provides 
that neither Party may use the dispute settlement procedures under Chapter 14 in relation to 
Chapter 11.  
 WT/COMTD/RTA/5/1 
WT/REG329/1 
 
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  ANNEX 1 
1. A comparison between the scheduled elimination of tariffs applied to the Parties' mutual 
imports and the duty rates applied by them on MF N imports is shown in Tables A1.1 (India) and 
A1.2 (Malaysia), by agricultural (WTO definition),  non-agricultural and total products. Applied MFN 
duty rates in 2011 serve as a comparison.  
2. India's overall average applied MFN tariff rate in 2011 was 12.4%. The average applied tariff 
on agricultural goods was 34.5%, compared to an average applied tariff of 9.3% on non-
agricultural products. Duty free tariff lines accounted for 3.1% of all tariff lines. On entry into force 
of the Agreement, Malaysian exporters enjoyed a relative margin of preference of 14% for 
agricultural goods vis-à-vis  the prevailing average MFN tariff in 2011, compared to a relative 
margin of preference of 34% for non-agricultural  goods. Overall, Malaysia's exporters enjoyed a 
relative margin of preference of 27% vis-à-vis  the prevailing average applied MFN tariff. By the 
end of the implementation period, the share of India's duty free lines for Malaysian imports is 
expected to increase to 75.3% of the total tariff, on which 53.2% will be for agricultural lines and 
78.5% for non-agricultural lines.  
Table A1.1 India: Indicators of MFN tariff ra tes and preferential rates for imports from 
Malaysia  
Origin 
of goods Year ALL PRODUCTS  Agricultural products a Non-agricultural products  
Average applied 
tariff Share of 
duty-free 
tariff 
lines 
(%) Average applied 
tariff Share of 
duty-free 
tariff lines 
(%) Average applied 
tariff Share of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2011 12.4 12.8 3.1  34.5 36.6 5.5 9.3 9.5 2.7  
Malaysia 01/07/2011 9.1 9.5 3.6 29.8 31.6 5.7 6.1 6.4 3.3 
 01/01/2012 7.8 8.1 3.6  26.3 27.9 5.7 5.2 5.4 3.3  
 01/01/2013 6.6 7.3 9.7 24.2 26.3 7.8 4.0 4.5 9.9 
 30/09/2013 5.1 14.7 65.7  22.5 39.1 42.5 2.5 8.2 69.1  
 01/01/2014 4.8 14.0 65.7 22,1 38.4 42.5 2.3 7.4 69.1 
 01/01/2015 4.7 13.6 65.7  21.6 37.6 42.5 2.2 7.1 69.1  
 01/01/2016 4.4 12.9 65.7 21.1 36.8 42.5 2.0 6.4 69.1 
 30/06/2016 4.3 17.3 75.3  20.7 44.2 53.2 1.9 8.8 78.5  
 31/12/2016 4.3 17.3 75.3 20.7 44.1 53.2 1.9 8.8 78.5 
 01/01/2017 4.2 17.2 75.3  20.5 43.9 53.2 1.9 8.8 78.5  
 01/01/2018 4.2 17.2 75.3 20.4 43.7 53.2 1.9 8.8 78.5 
 31/12/2018 4.2 17.2 75.3  20.4 43.7 53.2 1.9 8.8 78.5  
 01/01/2019 4.2 17.1 75.3 20.3 43.5 53.2 1.9 8.8 78.5 
 31/12/2019 4.2 17.0 75.3  20.2 43.2 53.2 1.9 8.8 78.5  
 
a WTO Definition. Note: Based on HS 2007 nomenclature.  Source: WTO Secretariat estimates based on data provided by India.  
 
3. Malaysia's average applied MFN rate is 2011 was 6%. The average applied tariff on 
agricultural products was 2.8% compared to an av erage applied tariff of 6.4% for non-agricultural 
products. Duty-free tariff lines accounted for 63.8% of all tariff lines. Upon entry into force of the Agreement, Indian exporters enjoyed a relative marg in of preference of 25% for agricultural goods 
vis-à-vis  the prevailing MFN tariff in 2011, and 19% for non-agricultural goods. Overall, Indian 
exporters enjoyed a margin of preference of 20% vis-à-vis  the prevailing average applied MFN 
tariff. By the end of the transition period, the share of duty free lines vis-à-vis  India is scheduled 
to increase to 82.8% of the total tariff, of which 90.3% will be for agricultural lines and 81.8% for 
non-agricultural lines.  WT/COMTD/RTA/5/1 
WT/REG329/1 
 
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  Table A1.2 Malaysia: Indicators of MFN tari ff rates and preferential rates for imports 
from India  
Origin 
of 
goods Year ALL PRODUCTS  Agricultural products a Non-agricultural products  
Average applied 
tariff Share of 
duty-free 
tariff 
lines 
(%) Average applied 
tariff Share of 
duty-free 
tariff lines 
(%) Average applied 
tariff Share of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2011 6.0  16.7 63.8  2.8 10.7 71.4 6.4 17.2 62.8  
India 01/07/2011 4.8 13.4 63.8 2.1 8.0 71.4 5.2 13.9 62.8 
 01/01/2012 4.3  12.0 63.8  1.8 6.8 71.4 4.6 12.5 62.8  
 01/01/2013 3.8 12.1 68.0 1.4 8.7 80.8 4.1 12.3 66.4 
 30/09/2013 3.7  14.1 73.8  1.2 13.0 88.1 4.0 14.1 72.0  
 01/01/2014 3.3 12.7 73.8 1.1 12.4 88.1 3.6 12.7 72.0 
 01/01/2015 2.9  11.4 73.8  1.1 12.0 88.1 3.2 11.3 72.0  
 31/12/2015 2.9 11.4 73.8 1.1 12.0 88.1 3.2 11.3 72.0 
 01/01/2016 2.6  9.9 73.8  1.0 11.5 88.1 2.8 9.9 72.0  
 30/06/2016 2.2 12.5 82.4 1.0 14.6 90.3 2.3 12.4 81.4 
 31/12/2016 2.2  12.5 82.4  1.0 14.6 90.3 2.3 12.4 81.4  
 01/01/2017 2.1 12.4 82.4 1.0 14.6 90.3 2.3 12.3 81.4 
 01/01/2018 2.1  12.4 82.4  1.0 14.6 90.3 2.3 12.3 81.4  
 31/12/2018 2.1 12.4 82.4 1.0 14.6 90.3 2.3 12.3 81.4 
 01/01/2019 2.1  12.4 82.4  1.0 14.6 90.3 2.3 12.3 81.4  
 31/12/2019 2.1 12.6 82.8 1.0 14.6 90.3 2.3 12.5 81.8 
 
a WTO Definition. Note: Based on HS 2007 nomenclature.  Source: WTO Secretariat estimates based on data provided by Malaysia. 
 
4. Table A1.3 shows the market access opportunities in India for Malaysia's top 25 exports, 
which in 2008-2010 accounted for an average of 54.2% of Malaysia's global exports. The table 
shows in which year all HS 8-digit tariff lines co rresponding to the product definition will become 
duty free in India.  
5. Malaysia's top 25 exports cover a total of 83 HS lines of which 27 were already duty-free on 
an MFN basis in 2011. By the end of the implementation period scheduled under the Agreement, of 
the 56 dutiable tariff lines, 24 will become duty free, leaving 32 subject to duty.  
Table A1.3 India: market access opportuniti es under the agreement for Malaysia's top 
25 exports  
Malaysia's top export products in 2008-2010  Access Conditions to India's import markets  
MFN (2011)  Duty-free in 
Remain Dutiable Average 
MFN 
applied 
rate Number of 
tariff lines  
HS number and description of the product  Share in 
global 
exports %  
Duty-free 
Dutiable 
01/07/2011 
01/01/2013 
30/09/2013 
30/06/2016 
854231 -- processors and controllers, whether or 
not combined with memories, converters, 
logic circuits, amplifiers, clock and timing circuits, or other circuits 7.0
 0.0 1             
271111 -- natural gas 6.4 5.0  1  1     
151190 - othe r 5.4  7.5  3     3  
270900 Petroleum oils and oils obtained from 
bituminous minerals, crude. 4.8 5.0  1     1 
847330 - parts and accessories of the machines of 
heading 84.71 4.4 0.0 7        
854239 -- othe r 2.9 7.5  1   1    
271019 -- othe r 2.8  4.2  9     9  
847170 - storage units 2.2 0.0 8        
852872 -- other, colou r 1.9  10.0  9    9   
847180 - other units of automatic data processing 
machines 1.5 0.0 1        
400122 -- technically specified natural rubber 
(tsnr) 1.4 20.0  1     1  
151110 - crude oil 1.3 100.0   1     1 WT/COMTD/RTA/5/1 
WT/REG329/1 
 
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  Malaysia's top export products in 2008-2010  Access Conditions to India's import markets  
MFN (2011)  Duty-free in 
Remain Dutiable Average 
MFN 
applied 
rate Number of 
tariff lines  
HS number and description of the product  Share in 
global 
exports %  
Duty-free 
Dutiable 
01/07/2011 
01/01/2013 
30/09/2013 
30/06/2016 
271011 -- light oils and preparations 1.3  5.0  6     6  
401519 -- othe r 1.2 10.0  1   1    
854290 - parts 1.2  0.0 1        
151620 - vegetable fats and oils and their 
fractions 1.1 43.8  8     8 
854140 - photosensitive semiconductor devices, 
including photovoltaic cells whether or not assembled in modules or made up into panels; light emitting diodes 1.1
 0.0 4        
854232 -- memories 1.0 0.0 1        
854129 -- othe r 0.9  0.0 1        
852990 - othe r 0.8 8.3  3 2  1    
847130 - portable automatic data processing 
machines, weighing not more than 10 kg, 
consisting of a least a central processing unit, a keyboard and a display 0.7
 0.0 2        
853710 - for a voltage not exceeding 1,000 v 0.7 7.5  1    1   
854190 - parts 0.7  0.0 1        
711319 -- of other precious metal, whether or not 
plated or clad with precious metal 0.7 10.0  7   7    
853690 - other apparatus 0.6  7.5  4 1    3  
  Total of the above 54.2   27 56 3 1 10 10 32 
 
Note: Based on HS 2007 nomenclature.  Source: WTO estimates based on data provided by the Indian authorities and UNSD, Comtrade data. 
 
6. Table A1.4 below shows market access opportunities for India's top 25 exports, which in 
2011 accounted for 47.3% of India's exports. In 2011 61 tariff lines were duty free on an MFN 
basis, with 29 dutiable. As a result of the Agreem ent a further 3 tariff lines will become duty free, 
with 26 remaining dutiable at the end of the implementation period.  
Table A1.4 Malaysia: market access opportun ities under the Agreement for India's top 
25 exports  
India's top export products in 2008-2010  Access Conditions to Malaysia's import 
markets 
MFN (2011)  Duty-free in  
Remain Dutiable Average 
MFN 
applied 
rate 
(%) Number of 
tariff lines 
HS number and description of the product  Share in 
global 
exports 
(%) 
Duty-free 
Dutiable 
01/01/2013 
30/06/2016 
271019 -- othe r 9.9  0.4 11 1 1   
710239 -- othe r 9.0 0.0 1     
271011 -- light oils and preparations 5.7  0.4 13 1 1   
711319 -- of other precious metal, whether or not plated 
or clad with precious metal 3.8 0.0 1     
260111 -- non-agglomerated 2.9  0.0 2     
300490 - othe r 1.6 0.0 15     
100630 - semi-milled or wholly milled rice, whether or not 
polished or glazed 1.3 40.0  2   2  
740311 -- cathodes and sections of cathodes 1.2 0.0 1     
294200 Other organic compounds. 1.2  0.0 1     
870322 -- of a cylinder capacity exceeding 1,000 cc but 
not exceeding 1,500 cc 1.0 21.8 1 10   10 
520100 Cotton not carded or combed. 1.0  0.0 1     WT/COMTD/RTA/5/1 
WT/REG329/1 
 
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  India's top export products in 2008-2010  Access Conditions to Malaysia's import 
markets 
MFN (2011)  Duty-free in  
Remain Dutiable Average 
MFN 
applied 
rate 
(%) Number of 
tariff lines 
HS number and description of the product  Share in 
global 
exports 
(%) 
Duty-free 
Dutiable 
01/01/2013 
30/06/2016 
230400 Oil-cake and other solid residues, whether or not 
ground or in the form of pellets, resulting from the 
extraction of soybean oil. 0.9 0.0 1     
730511 -- longitudinally submerged arc welded  0.9 25.0  1   1  
851712 -- telephones for cellular networks or for other 
wireless networks 0.9 0.0 1     
610910 - of cotton 0.8  0.0 1     
711419 -- of other precious metal, whethe r or not plated 
or clad with precious metal 0.7 0.0 1     
020230 - boneless 0.6  0.0 1     
870321 -- of a cylinder capacity not exceeding 1,000 cc  0.6 20.0 2 10   10 
620630 - of cotton 0.5  0.0 1     
880330 - other parts of aeroplanes or helicopters  0.5 0.0 1     
890590 - othe r 0.5  0.0 1     
721049 -- othe r 0.5 25.0  3   3 
890190 - other vessels for the transport of goods and 
other vessels for the transport of both persons 
and goods 0.4 8.3 2 1  1  
720241 -- containing by weight more than 4% of carbon  0.4 0.0 1     
030613 -- shrimps and prawns 0.4  0.0 1     
Total of above 47.3  61 29 2 1 26 
 
Note: Based on HS 2007 nomenclature.  Source: WTO estimates based on data provided by the Malaysia authorities and UNSD, Comtrade data. 
 
__________