WT/REG329/M/1  
 
4 October 2013  
(13-5355) Page: 1/2  
Committee on Regional Trade Agreements 
Seventieth Session    
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
INDIA AND MALAYSIA, SERVICES 
NOTE ON THE MEETING OF 17-18 SEPTEMBER 2013 
Chairman: Ambassador Francisco Lima Mena (El Salvador) 
1.1.  The 70th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/4163/REV.1 dated 4 September 2013. 
1.2.  Under Agenda Item B.IX of this session , the CRTA considered the Free Trade Agreement 
(FTA) between India and Malaysia (hereinafter "the Agreement"). 
1.3.  The Chairman said that the Agreement had entered into force on 1 July 2011. It had been 
notified to the WTO by the Parties on 6 September 2011 under GATS Article V:7(a) as an 
Agreement providing for the liberalization of trade in  services within the meaning of Article V of the 
GATS (document S/C/N/599). The text of the Agreement was available, together with its Annexes, 
on the Parties' official websites. The Factual Presentation on the services aspects (document WT/REG329/1 dated 9 July 2013) had b een prepared by the Secretariat on its own 
responsibility in full consultation with the Parties, in accordance with paragraph 7(b) of the 
Transparency Mechanism for Regional Trade Ag reements (document WT/L/671) ("TM"). Written 
questions and replies on this Agreement had been distributed in document WT/REG329/2 dated 9 September 2013. He proposed to organize the cons ideration of the Agreement by first asking the 
Parties and then other Members to give any general comments and then use the 
Factual Presentation, document WT/REG329/1, to guide the discussion. 
1.4.  The representative of India thanked the Secr etariat for preparing the Factual Presentation on 
the India-Malaysia FTA so that Members could get an overview of the Agreement. She thanked the 
delegations of Australia, Canada and the European  Union for showing interest in the Agreement by 
asking written questions in advance. India also thanked the delegation of Malaysia for its excellent 
co-operation in the preparatory work.  
1.5.  In the early 1990's, India had embarked on the 'look east policy' to utilise the potential for 
beneficial interaction with South East Asian countries. There was a commitment from both sides, at the highest level, to utilise this potential. The India Malaysia Comprehensive Economic 
Cooperation Agreement (CECA) needed to be seen  in this context. The broad objective of the 
Agreement was to enhance trade and investment flows between the two countries and contribute 
to their reciprocal economic growth. Malaysia was India's third most important trading partner 
amongst the ASEAN countries and also India's gateway to ASEAN and China. India was the largest 
trading partner for Malaysia in South Asia. With the coming into force of the Agreement from 1 
July 2011, bilateral economic engagement had received a major boost. The Agreement containing 
16 Chapters and 15 Annexes including schedules of commitments under goods and services, 
provided for better market access for trade in goods, services, investment and economic cooperation.  
1.6.  Bilateral trade, as per data maintained by the Director General of Commercial Intelligence 
and Statistics of India had shown an upward tren d over the last five years. It had grown from 
US$10.6 billion in 2008-09 to US$14.4 billion in 2012 -13, an increase of around 36%. India's 
exports to Malaysia had grown from US$3.4 billion in 2008-09 to US$4.4 billion in 2012-13 (an WT/REG329/M/1 
 
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  increase of around 30%) and imports from Malaysia had increased from US$7 billion in 2008-09 to 
$10 billion in 2012-13, an increase of 42%. 
1.7.  In  the area of trade in services, both sides had exchanged WTO 'plus' offers in terms of 
sectoral coverage as well as depth within each sector and sub-sector. Malaysia had offered 
commitments in the categories of contractual se rvice suppliers and independent professionals in 
commercially meaningful sectors including accounting and auditing, architecture, urban planning, 
engineering services, nursing and pharmacy, computer and related services, management 
consulting services, etc. Malaysia had also removed requirements relating to economic needs tests 
for Indian professionals entering Malaysia and ha d offered substantive commitments in the area of 
cross border supply of services which was of immense value for India's IT and Information 
Technology Enabled Services industry. A liberal mode 4 offer covered all categories of natural 
persons covering contractual service suppliers and independent professionals delinked from 
commercial presence. On regulatory transparency for visa formalities, CECA provided a detailed procedure which was more specific and substantive than the obligations contained in the GATS. 
This was of great value to service providers. Further both in goods as well as services, a general 
review of coverage was envisaged in the CECA with provision to include new services during reviews. In the years to come, India looked forward to make the best of the tariff and non-tariff 
concessions provided under the Agreement and also hoped for enhanced economic cooperation 
with Malaysia. 
1.8.  The representative of Malaysia thanked Members for the interest shown in the Malaysia-India 
Comprehensive Economic Cooperation Agreement. The CECA was signed on 18 February 2011 in 
Kuala Lumpur. Upon completion of necessary domestic processes, the Agreement had come into 
force on 1 July 2011. The FTA between Malaysia and India reflected the strong commitments by 
both countries to encourage growth in bilatera l trade and enhance economic cooperation. The 
CECA was a comprehensive agreement that covered trade in goods, trade in services, investments 
and movement of natural persons. It added valu e to the benefits that accrued from the ASEAN-
India Trade in Goods Agreement and would further facilitate and enhance two-way trade in goods, 
services, investment and bilateral economic ties. 
1.9.  In the area of services, India had committed to allow Malaysian equity share holding ranging 
from 49% to 100% in 84 services sub-sectors, including in professional services, healthcare, telecommunications, retail and environmental services. In return, Malaysia had made 
commitments to allow Indian equity shareholding  in 91 services sub-sectors. The CECA also 
contained a dedicated chapter that facilitated th e temporary entry of installers and servicers, 
contractual service suppliers, independent professionals and business visitors (including potential 
investors). Finally, the Agreement also provided a framework to further facilitate cross border 
investments between the two countries through commitments on national treatment as well as protection of investors and investments thro ugh expropriation, transfers and subrogation 
provisions. 
1.10.  The representative of the European Union th anked the Parties for their replies.  They were 
still under assessment and her delegation would follow up, if need be. 
1.11.  The representative of the United States thanked the Parties and acknowledged the effort put 
into the questions and replies document. 
1.12.  The Chairman said that the considerat ion of the Services Aspects of the Free Trade 
Agreement between India and Malaysia had allowed the Committee to clarify a number of 
questions and the oral discussion of this RTA could be concluded in accordance with paragraph 11 
of the Transparency Mechanism. If any delegations wished to ask follow up questions they were invited to forward submissions in writing to the Secretariat by 24 September 2013 and Parties 
were asked to submit replies in writing by no later than 8 October 2013. In accordance with 
paragraph 13 of the Transparency Mechanism all wr itten submissions, as well as minutes of this 
meeting would be circulated promptly, in all WTO official languages, and would be made available on the WTO website.  
1.13.  The Committee took note of the comments made. 
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