India-Malaysia relations are moving beyond routine diplomatic engagements to a more structured and multi-dimensional partnership, gradually developed over longstanding historical and cultural connections. As the narrative shifts to the geopolitical landscape, it is crucial to consider Malaysia’s strategic position within India’s Act East policy and its broader Indo-Pacific engagement. For India’s pursuit of technological sovereignty, Malaysia’s role in global semiconductor supply chains makes it an indispensable partner.
Malaysia’s position in the Strait of Malacca is vital. This maritime corridor handles 55-60 percent of India’s trade, and 30 percent of global trade. Any disruption here could threaten India’s economic stability and maritime interests. Today, several conflicts globally—such as the Russia–Ukraine war and the US-Israel conflict with Iran—impact chokepoints like the Strait of Hormuz and spill over to the Strait of Malacca. This can threaten India's regional interests. Thus, strong, long-term strategic relations with Malaysia are crucial to safeguard India’s Indo-Pacific interests.
Despite some outstanding issues such as the extradition of Zakir Naik, Malaysia is a longstanding friend with millennia-old trade and people-to-people linkages—a fact underscored by Dato' Seri Anwar Ibrahim during his speech at the Indian community reception in Kuala Lumpur during Modi’s recent visit. He not only called Modi his “personal friend” but also termed India’s Act East policy a remarkable success.
It may be noted that on 7-8 February 2026, Modi paid an official visit to Malaysia, marking his first overseas visit of the year and the first since the signing of the Comprehensive Strategic Partnership between the two nations in 2024. During his visit, PM Modi emphasised the shared goal to transform bilateral relations into a growth engine for the security and stability of the Indo-Pacific region and declared that “trust has become India’s strongest currency”.
Building on this context, it becomes clear that Malaysia is one of the most indispensable Southeast Asian partners in India’s Act East engagement. This article argues that, among several areas of cooperation, three key domains highlight why Malaysia matters in India’s Act East policy amid swiftly changing regional geoeconomic and geopolitical dynamics.
1. Semiconductor and Technology Cooperation
2. Digital integration
3. Defence and Maritime Security Cooperation
These pillars further consolidate India-Malaysia ties, which have strong foundations in trade, skilled labour mobility, diplomatic trust, and defence cooperation, particularly in personnel training. Furthermore, while sectors such as defence trade and energy cooperation are still nascent, they hold potential. Diaspora linkages, which are more than two millennia old, add another dimension—the existence of a thriving Indian community in Malaysia provides an important source of Indian soft power to further consolidate the relationship.
One of the key developments in India-Malaysia relations is the recognition that the two sides need to make a systematic, swift transition from traditional trade (in palm oil, agriculture, fast-moving consumer goods, etc.) to cutting-edge high-technology trade and collaboration, particularly in the semiconductor industry. Malaysia contributes around 13 percent to global semiconductor trade and possesses advanced technological capabilities in the assembly, testing, and packaging of semiconductors.
This makes Malaysia an important partner for India as it seeks to strengthen its semiconductor industries and secure resilient supply chains in the region. In this regard, both countries have welcomed several ongoing cooperation initiatives, including those between IIT Madras Global and the Advanced Semiconductor Academy of Malaysia (ASEM), and between the Indian Electronics and Semiconductor Association (IESA) and the Malaysia Semiconductor Industry Association (MSIA). These initiatives are important for deepening semiconductor industry cooperation and building a resilient, competitive ecosystem in the Indo-Pacific region. India’s growing cooperation with Japan, Singapore, Taiwan, the US and South Korea can complement the emerging semiconductor partnership with Malaysia.
In the 21st century, as the nature of threats shifts toward the cyber domain, the two nations need to integrate technological capabilities and accelerate digital and technological cooperation. The February 2026 visit to Malaysia by Modi is an important development in this direction, and the initiative to institutionalise the Malaysia-India Digital Council (MIDC) to promote cooperation in AI, fintech, and cybersecurity is a significant step forward in advancing digital cooperation. One of the most important developments is connecting India’s Unified Payments Interface (UPI) with Malaysia’s PayNet, which would facilitate cross-border digital payments and promote the people-to-people connection. The efforts of digital integration strengthen both nations in their fight against transnational organised crime and contribute to maintaining open, inclusive and rules-based digital ecosystems in the Indo-Pacific.
Malaysia’s geographical location makes it indispensable to India’s security and economic interests in the Indo-Pacific. Open, accessible, and safe movement of ships and personnel becomes an essential aspect in this regard.
India and Malaysia both recognise the importance of Freedom of Navigation and free trade, grounded in the principles of the United Nations Convention on the Law of the Sea (UNCLOS), particularly amid the geopolitical turbulence in the South China Sea. These convergences gain importance, given Malaysia’s quiet diplomacy in dealing with the South China Sea. Unlike the Philippines, Malaysia does not want to flare up the issue with China by being vocal and upfront about it.
To operationalise the security alignment and cooperation between India and Malaysia, both nations welcomed the establishment of the Malaysia-India Defence Cooperation Committee (MIDCOM) and its subcommittees, including the Strategic Affairs Working Group (SAWG) and the Su-30 Forum. These developments significantly facilitate the sharing of technical expertise and reduce dependency on external supply chains. The two sides also hold navy-to-navy interactions through bilateral and multilateral naval exercises such as ‘Samudra Laksamana’, MILAN, and the ASEAN-India Maritime Exercise (AIME). Since 2012, the two Armies have also conducted the Harimau Shakti exercise frequently. In 2023, the two countries’ Air Force conducted Air Exercise Udara Shakti. Additionally, Indian Naval Ships regularly make port visits to Malaysia, and the defence forces hold annual staff-to-staff talks.
Malaysia was the first Southeast Asian country to sign a defence cooperation agreement with India in 1993. The agreement was amended in 2023 during Indian Defence Minister Rajnath Singh’s visit, when Hindustan Aeronautics Limited opened a regional office in Kuala Lumpur to support military modernisation in the region. Reflecting on recent progress, Indian High Commissioner BN Reddy stated in 2024 that “India-Malaysia defence ties are on a robust trajectory.”
India’s defence partnership with the Philippines, highlighted by the US$375 million BrahMos missile deal, offers a model for India-Malaysia cooperation. New Delhi and Putrajaya have institutionalised defence ties through a comprehensive strategic partnership and mechanisms like MIDCOM, focusing on interoperability through exercises such as Harimau Shakti. Drawing from the Philippines model, both countries could pursue sustained maritime initiatives and expand defence-industrial cooperation, including joint ventures and platform integration, as seen in the Su-30 MKM collaboration. These steps would further strengthen the India-Malaysia partnership as a stabilising force in the region.
Malaysia matters to India’s regional priorities not only as a trade partner but also as a longstanding, trusted strategic partner in the Indo-Pacific. Malaysia is strategically positioned at the crossroads of geopolitical and geoeconomic dynamics in the Indo-Pacific and is one of the most significant and stable democracies in Southeast Asia. Strong strategic ties with Malaysia can give India a better position in dealing with growing strategic anxieties amid escalating geopolitical hegemonic rivalry in the Indo-Pacific region.
India should strengthen its partnership with Malaysia, especially in the semiconductor sector, which is vital for technological sovereignty, economic growth, and national security. India’s goals, including the Semiconductor Mission 2030 and the AI Mission, closely align with Malaysia’s New Industrial Master Plan 2030, the National Semiconductor Strategy, and the 13th Malaysia Plan. This alignment makes deeper cooperation in semiconductors and emerging technologies both timely and practical.
India’s global influence should be built not only on ties with major powers but also on strong partnerships with middle powers and regional neighbours. Strengthening relations with Malaysia, a key ASEAN member, secures India’s interests and can generate positive effects for India’s engagement with other ASEAN nations, further enhancing its position in the Indo-Pacific. Malaysia’s expanded role in India’s Act East policy supports these objectives.
Rahul Mishra is an Associate Professor at the Centre for Indo-Pacific Studies, School of International Studies, Jawaharlal Nehru University, New Delhi, India, and a Senior Research Fellow at the German-Southeast Asian Center of Excellence for Public Policy and Good Governance, Thammasat University, Thailand.
Dalip Kumar is a Doctoral Candidate at the Centre for Indo-Pacific Studies, School of International Studies, Jawaharlal Nehru University, India.
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Rahul Mishra is a Senior Research Fellow, the German-Southeast Asian Centre of Excellence for Public Policy and Good Governance, Thammasat University, Thailand and Associate Professor, ...
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Dalip Kumar is a Doctoral Candidate at the Centre for Indo-Pacific Studies, School of International Studies, Jawaharlal Nehru University, India. ...
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