In a push for international trade in local currencies, India and Malaysia have agreed to promote bilateral trade and investment in their own currencies.
The decision was taken during Prime Minister Narendra Modi’s two-day (7-8 February 2026) visit to Malaysia.
During the visit, both Modi and Malaysian Prime Minister Anwar Ibrahim discussed a range of areas for enhanced bilateral partnership, including trade, digital economy, semiconductors, energy and defence, said a joint statement on Sunday.
“Both prime ministers appreciated the continued collaboration between the Reserve Bank of India and Bank Negara Malaysia to promote usage of local currency settlement in bilateral trade and investments, and encouraged industries on both sides to further facilitate the invoicing and settlement of trade in local currencies, i.e., Indian Rupee and Malaysian Ringgit,” it said.
Trade ties
Enhancing the ties on the digital cooperation front, both leaders acknowledged the formalization of the Malaysia-India Digital Council (MIDC), recognizing its potential as a key platform to advance digital cooperation, foster innovation, and explore collaborative projects in areas such as fintech, e-governance, cybersecurity, artificial intelligence, Digital Public Infrastructure (DPI), and emerging technologies.
“PM @narendramodi and PM @anwaribrahim of Malaysia held bilateral talks today. The two leaders reviewed cooperation in areas such as energy, biotechnology, trade, IT, and infrastructure. They agreed to further strengthen collaboration in sectors like defence, digital technologies, security, semiconductors, and AI,” tweeted the office of the Indian prime minister.
In another major tie-up in the digital finance front, India’s NPCI International Ltd (NIPL) and PayNet Malaysia have agreed to establish bilateral payment linkages. Both leaders, according to the joint statement, noted that this integration will significantly enhance the ease of doing business and provide seamless, low-cost remittance, and payment solutions.
India, in the past few years, made efforts to increase global partnerships in the fintech space with the NPCIL’s Unified Payments Interface (UPI) as the face of India’s success on the digital economy front.
On the trade front, both countries are engaged through the Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA) and the ASEAN-India Trade in Goods Agreement (AITIGA). The AITIGA is currently being reviewed in a bid to make it mutually beneficial, trade facilitative, and relevant to current global trading practices.
The tenth meeting of the India-Malaysia CEO Forum was also held during Modi’s visit to the Southeast Asian country in Kuala Lumpur on 7 February.
Committing to enhanced partnership in the energy space, Modi noted the strides made by oil and gas major PETRONAS and Gentari in India’s renewable energy and green hydrogen landscape and emphasized the potential for further collaboration in large-scale solar energy initiatives, leveraging Malaysia’s expertise to drive clean energy solutions and achieve mutual net-zero ambitions.
Gentari is among the top investors in India’s green-energy space, with its footprint in the utility-scale renewable energy projects, C&I space through its acquisition of Amplus Solar in 2023 and in the green ammonia space with its investment in AM Green Ammonia.
During the visit, Modi also engaged with CEOs of Petronas, Berjaya, Khazanah, and Dato’ K.S. Pua of Phison Electronics regarding their plans for India in key sectors.
Petronas is an exploration and production major in the oil and gas space, and the development comes at a time when India is eyeing energy security and is also inviting global majors to invest in the E&P space in India.
Defence ties
On the defence front, both the prime ministers encouraged the growing maritime cooperation, including through regular goodwill and operational deployments.
Both countries have already set up the Malaysia-India Defence Cooperation Committee (MIDCOM) and its subcommittees, and agreed on the terms of reference for the establishment of a Strategic Affairs Working Group (SAWG) and Su-30 Forum.
Both Leaders appreciated India’s steadfast engagement in the ASEAN Defence Ministers’ Meeting Plus (ADMM-Plus) framework and welcomed the co-chairmanship with Malaysia of the Counter-Terrorism Working Group for the 2024-2027 term.
Modi and Ibrahim extended an invitation to all members of the ADMM-Plus platform to participate in the forthcoming expert working group on Counter Terrorism Table-Top Exercise (EWG CT TTX), co-chaired by India and Malaysia, and scheduled to be hosted by Malaysia in 2026.
Both sides also agreed to expand strategic collaboration on food security, nutrition, and agricultural trade, with a special focus on enhancing supply-chain resilience and stable access to staple commodities.
At the heart of the discussions was the joint commitment to ensure stable, resilient, and sustainable supply chains for essential agricultural products—a move seen as increasingly vital amid global disruptions and price volatility in world markets. Both leaders pledged to respect each country’s domestic policy frameworks on food systems while pursuing greater cooperation.
Also, Malaysia reaffirmed its role as a reliable supplier of sustainable palm oil to India. Both leaders encouraged expanded collaboration in palm cultivation to enhance yield efficiencies and support sustainable agricultural practices. They also committed to cooperation along the entire palm oil value chain, including downstream, higher value-added palm-based products, and agreed on structured engagement to resolve market access issues in a timely manner.
Indonesia and Malaysia are the major suppliers of RBD Palmolein and Crude Palm Oil to India. During November-December 2025, Malaysia was the top supplier of crude palm oil CPO (495,259 tonnes) followed by CPO from Indonesia (384,320 tonnes).