For Southeast Asian countries, including Malaysia, these changes are of immediate significance. India is becoming a key element in their economic and geopolitical strategy, providing resilience in the areas of economic security, food, energy, technology, and strategic flexibility.
Therefore, Prime Minister Narendra Modi's visit to Malaysia on February 7-8 holds special significance. For Kuala Lumpur, it is an opportunity to move beyond traditional policies and establish India as a strategic partner for the long term.
The Indian Economic and Demographic Miracle
According to estimates from the International Monetary Fund, India maintains its status as the fastest-growing major economy in the world, with projected GDP growth of around 6.4%, while many developed and developing countries barely reach 3%.India's nominal GDP has already surpassed $4 trillion. IMF and World Bank forecasts indicate that during this decade, India could surpass Japan and Germany, and by 2040 become the largest economy in the world.
This growth is driven by real factors: a growing domestic market, a favorable demographic structure, increased government investment, expanded industrial production, and a shift towards an investment and productivity-oriented development model.In the past decade, especially under Modi's leadership, India has implemented a series of structural reforms that many large democracies struggle with: the introduction of a Goods and Services Tax, the unification of bankruptcy procedures, the creation of digital financial platforms, and major infrastructure projects. These measures have strengthened state institutions, reduced transaction costs, and improved capital allocation.
Demography plays a key role in determining national power, and in India, it continues to grow, while in China, it is leveling off. Despite the persistent influence of Beijing, the country faces structural problems: high debt levels, issues in the real estate market, and a demographic decline.
According to World Bank forecasts, China's growth may fall from 4.9% in 2025 to 4.2% in 2027, indicating a longer cooling of the economy.
Thus, India's rise becomes not only an economic phenomenon but also a combination of economic and military-political power, creating a counterbalance without direct confrontation.
“Act East” and “Make in India” Strategies: Benefits for Southeast Asia
The “Act East” strategy, launched in 2014, has established India as a permanent power in the Indo-Pacific region with long-term interests in the security and prosperity of Southeast Asian countries. It has not only deepened integration and transport links but also strengthened the regional balance and expanded India's economic-defense "umbrella."This policy has effectively brought ASEAN back to the center of strategic discussions, from the Andaman Sea to the Malacca Strait, creating conditions for India's active participation, which adds additional confidence amid rising tensions.
If “Act East” expands India's strategic depth, then the “Make in India” strategy strengthens its economic influence.
Together, they create synergy: India becomes simultaneously a market, a manufacturing base, and a provider of security.The country's economic policy has helped strengthen its foundation by reducing dependence on the services sector. A more powerful manufacturing ecosystem creates alternative production centers and enhances regional supply chains.
The Digital India program completes the technological transformation, creating one of the most scalable digital economies in the world. It reduces transaction costs, expands financial access, supports small businesses, and accelerates the adoption of new technologies in AI, fintech, and e-governance.
For Malaysia and other ASEAN countries, this opens new opportunities for affordable digital inclusion, fintech development, cybersecurity, and the creation of infrastructure for digital trade.
Today, India has over 200,000 startups in various fields, including fintech, healthcare, defense technologies, and space, making it one of the largest innovation ecosystems in the world.
Special attention to strategic sectors such as semiconductors opens additional opportunities for Malaysia as an important hub in the global chip manufacturing chain. The partnership between the countries complements their competencies: India provides scale and demand, while Malaysia offers integration and manufacturing depth.
In the energy sector, India is becoming one of the largest markets for renewable energy, storage systems, green hydrogen, and grid modernization, creating opportunities for joint investments and technology transfer.
This cooperation helps Malaysia move up the value chain, avoiding the "middle-income trap" and attracting quality investments.
A crucial aspect is food security: in 2024, India allowed a one-time shipment of 200,000 tons of non-basmati rice to Malaysia, making an exception to export restrictions and confirming its status as a stabilizing partner amid market instability.
Deepening Trade Relations
Over the past decade, the volume of bilateral trade has nearly doubled, amounting to about $19-20 billion per year. Malaysia has become one of India's key trading partners in ASEAN, while India is an important partner for Malaysia in South Asia.Malaysia exports electronics, semiconductors, palm oil, chemicals, and petroleum products, while India supplies refined fuels, pharmaceuticals, equipment, metals, food, and IT services.
Notably, India consistently remains one of the largest buyers of Malaysian palm oil, providing a reliable market, while supplies of Indian pharmaceuticals contribute to improving healthcare accessibility in the country.
If by 2030 India's economy approaches $7 trillion and the middle class grows by hundreds of millions, the trade corridor between the countries could become one of the most dynamic in Asia.
People-to-People Connections and “Soft Power”
The relationship between India and Malaysia is based not only on economics and politics but also on a solid social foundation, including tourism, culture, education, and scientific cooperation.Among popular cultural exchanges, the influence of Bollywood and linguistic ties stand out. Indian universities have been training Malaysian students in medicine, engineering, and technology for many years, creating strong alumni networks.
Today, India also ranks among the top countries in the world for the number of STEM graduates, and its startup environment enhances the exchange of talent and knowledge.
Stabilizing Military Power
Amid growing threats, India's active participation can strengthen regional stability. Under Modi's rule, the country's military power has significantly increased: India has transformed from a predominantly defensive force into a credible deterrent factor in the Indo-Pacific region.India ranks among the top five countries in military spending, which exceeds $80-90 billion per year.
Its naval forces possess two aircraft carriers and a developing fleet of destroyers, frigates, and submarines equipped with ballistic missiles. A constant presence in the Indian Ocean, Andaman Sea, and the Malacca Strait underscores the country's role as a protector of key maritime routes.
The Air Force is also among the largest in the world, with over 1,700 aircraft, including modern Dassault Rafale fighters.
The combined naval and air power of India ensures force projection, security of trade routes, and strategic deterrence, which is crucial for a region that relies on open sea and air routes.
Joint exercises help enhance the interoperability of armed forces and readiness for common challenges.
A Shared Future
The role of India in the modern world and its prospects are becoming increasingly significant. India's rise coincides with China's growth slowdown, gradually changing the balance of power in Asia.For Malaysia, it is important not to choose between India and other powers but to prepare in advance for its strengthening or to respond to changes after the fact.
Modi's visit can be seen as a strategic milestone - the beginning of a new era of partnership based on history, trust, and common goals. Deepening cooperation in defense, technology, energy, education, and culture becomes not just a sensible step but a foundation for long-term prosperity, security, and strategic autonomy for Malaysia.
