Stock Markets February 8, 2026

Modi and Anwar Reaffirm Drive to Deepen Trade, Sign Cooperation Pacts

Leaders commit to broader economic ties and local-currency settlement, witnessing 11 cooperation agreements including semiconductors and disaster management

By Leila Farooq
Modi and Anwar Reaffirm Drive to Deepen Trade, Sign Cooperation Pacts

India's Prime Minister Narendra Modi and Malaysian Prime Minister Anwar Ibrahim pledged renewed efforts to strengthen bilateral trade and pursue collaborations across multiple sectors during Modi's two-day visit to Malaysia. The leaders observed the signing of 11 cooperation agreements covering areas such as semiconductors, disaster management and peacekeeping, and committed to promote local-currency settlement for cross-border transactions with a view to exceed last year’s $18.6 billion in bilateral trade.

Key Points

  • India and Malaysia elevated ties to a comprehensive strategic partnership and are now focused on turning that framework into actionable cooperation.
  • The leaders witnessed the exchange of 11 cooperation agreements, with named areas including semiconductors, disaster management and peacekeeping - sectors that intersect technology, defence and emergency response capabilities.
  • Both governments intend to promote local-currency settlement for cross-border activities and aim to increase bilateral trade beyond last year’s $18.6 billion, while Malaysia supports India’s request to open a consulate in Sabah.

KUALA LUMPUR, Feb 8 - India’s Prime Minister Narendra Modi concluded a meeting with Malaysian Prime Minister Anwar Ibrahim in the administrative capital Putrajaya where both leaders renewed their commitment to advance bilateral trade and broaden cooperation across a range of sectors.

Modi is on a two-day state visit to Malaysia, his first since the two countries elevated their relationship to a comprehensive strategic partnership in August 2024. At a press conference following the meeting at the Malaysian prime minister's official residence, Anwar described the upgraded partnership as comprehensive, noting it spans trade and investments, food security, defence, healthcare and tourism.

After their discussions, the two leaders witnessed the exchange of 11 cooperation agreements. The signed memoranda and accords touched on several areas explicitly mentioned by the leaders, including semiconductors, disaster management and peacekeeping.

On the financial front, Anwar said the two governments would continue to push for greater use of local-currency settlement in cross-border activity. He also expressed the aspiration that bilateral trade would rise above last year’s reported total of $18.6 billion.

In addition to trade and payments cooperation, Malaysia signalled support for India’s plan to establish a consulate in Sabah on the island of Borneo, a move Anwar said Malaysia would back.

The leaders framed their discussions and the exchanged agreements as part of an effort to operationalize and accelerate the comprehensive strategic partnership, with both governments committing to implement the commitments made during the visit in a timely manner.


Context and next steps

The formal witnessing of agreements and the public commitments by both prime ministers underline an intent to translate diplomatic ties into concrete cooperation in areas named by the leaders. Specific details of each of the 11 agreements were not enumerated at the press briefing beyond the sectors mentioned, and the pledges include actions that will require follow-through by government agencies and private-sector partners.

Risks

  • The aspiration that bilateral trade will surpass last year’s $18.6 billion is stated as a hope rather than a guaranteed outcome, leaving economic results dependent on implementation and broader market conditions - impacting trade and investment flows.
  • Efforts to expand local-currency settlement for cross-border transactions face uncertainty in execution and uptake by businesses and financial institutions, which could affect banking and foreign-exchange processes.
  • The planned support for an Indian consulate in Sabah requires administrative follow-through; any delays or diplomatic procedural steps could postpone its establishment, with implications for consular services and regional engagement.

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