PM Narendra Modi’s weekend in Kuala Lumpur focused on advancing India–Malaysia ties: forging a strategic partnership, signing new memoranda on semiconductors, health and disaster management, and marking Modi’s first foreign trip of 2026 with a red-carpet welcome.

Malaysia is India’s third-largest trading partner in ASEAN, with bilateral trade close to $20 billion in 2024–25. It is also chairing the review of the ASEAN–India Trade in Goods Agreement (AITIGA), the centrepiece of India’s free trade regime with Southeast Asia.

The joint statement from the visit describes India as a “vital global economic partner" and puts trade, investment and technology at the core of the relationship. Explicit emphasis has been given on semiconductors, the digital economy and industrial collaboration. Malaysian Prime Minister Anwar Ibrahim described his talks with Modi as “very vital, very strategic and critical," underlining that both sides see the partnership as a strategic platform, not merely a commercial one.

At the same time, the document goes out of its way to “welcome" the ongoing review of AITIGA and calls for a deal that is mutually beneficial, trade-facilitative and aligned with contemporary global practices.

It makes one thing very clear. India is using this bilateral track to build credibility and trust inside ASEAN just as it prepares to push hard for changes to a regional trade agreement it has long regarded as lopsided.

India’s complaints about AITIGA are not abstract. Between 2011 and 2023, India’s annual trade deficit with ASEAN widened from $7.5 billion to roughly $44 billion. Imports from ASEAN grew by about 234% over that period, while India’s exports rose only about 130%.

Officials and analysts point to a familiar list of problems. Tariff cuts that have created inverted duty structures for some sectors, non-tariff barriers that keep Indian goods out even where tariffs have fallen, and rules of origin that are porous enough to allow third-country products to enter India via ASEAN hubs while still........

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