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  jata  Malaysia's Free Trade Agreements

 
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Malaysia - India

BACKGROUND

  • Malaysia and India established the Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA) on 24 September 2010. MICECA came into force on 1 July 2011.

  • MICECA is a comprehensive agreement that covers trade in goods, trade in services, investments and movement of natural persons. It value-adds to the benefits shared from ASEAN-India Trade in Goods Agreement (AITIG) and will further facilitate and enhance two-way trade , services, investment and economic relations in general.

  • The main text of the Agreement can be reviewed via this link MICECA Agreement

 

TRADE WITH INDIA

  • In 2016:

    • trade with India amounted to US$10.77 billion (RM44.50 billion) from US$12.02 billion (RM46.80 billion), decrease of 4.9% from 2015;

    • exports recorded a decrease of 7.0%, valued at US$7.13 billion (RM29.44 billion) from US$8.12   billion (RM31.67 billion) at 2015;

    • imports decreased by 0.5% to US$3.64 billion (RM15.06 billion) from US$3.90 billion (RM15.14 billion) at 2015;

  • Major exports to India in 2016:

    • Palm Oil & Palm-Based Products

    • Electrical and Electronic Products

    • Crude Petroleum

    • Manufactures of Metal

    • Chemicals and Chemical Products

    • Saw Logs

  • Major imports from India in 2016:

    • Petroleum Products

    • Manufactures of Metal  

    • Other Agricultures – Live Animals and Meat

    • Chemicals and Chemical Products

    • Machinery, equipment and parts

    • Iron & Steel Products

  • In 2016, India was Malaysia’s:

    • 7th largest trading partner

    • 7th largest export destination

    • 11th largest import sources

SCOPE

Areas covered under MICECA include:

  1. Initial Provisions and General Definition

  2. Trade in Goods

  3. Rules of Origin

  4. Customs Cooperation

  5. Trade Remedies

  6. Sanitary and Phyto-sanitary Measures

  7. Technical Barriers to Trade

  8. Trade in Services

  9. Movement of Natural Persons

  10. Investment

  11. Economic Cooperation

  12. General Exceptions

  13. Transparency

  14. Dispute Settlement

  15. Institutional Provisions

  16. Final Provisions

TRADE IN GOODS

Under MICECA, both Malaysia and India will progressively reduce or eliminate tariffs on their respective industrial and agricultural products. Modality for tariff liberalisation for good under MICECA is AITIG plus, with fewer product being exempted from tariff concession (reduction or elimination) and shorter timeframe for reduction or elimination of tariff.

Key features of the tariff liberalisation package under MICECA are:

  • Elimination or reduction of tariff gradually from the date the Agreement enters into force as of 1 July 2011. The modalities of tariff elimination reduction are as follows:

    • Normal Track 1 (NT1): tariffs on all products listed in NT1 will be eliminated by 30 September 2013, i.e., three months in advance of AITIG;

    • Normal Track 2 (NT2): tariffs on all products listed in NT2 will be eliminated by 30 June 2016, i.e., six months in advance of AITIG; and

    • Sensitive Track (ST): tariffs on all products listed in ST will be reduced to 5% by 30 June 2016, i.e., six months in advance of AITIG.

  • Malaysia has been granted better concessions for palm oil and palm oil products under MICECA:

    • India will bind tariffs on refined palm oil (RPO) at 45% by 31 December 2018 (one year earlier than India’s committed timeline under AITIG).

    • India will bind tariffs on 3 palm products at 45% by 31 December 2018 (these 3 products were excluded from tariff concessions under AITIG). 


For Exclusion List (EL), India has excluded 1,225 products under MICECA compared with 1,298 under AITIG.  Malaysia has excluded 838 products under MICECA, compared with 898 under AITIG.

EXPORT-IMPORT PROCEDURES

Exporting to India

  • If you are exporting to India, please click this link to check on the preferential duties under MICECA:

India - Schedule of Tariff Commitments

  • Nevertheless, in order for your product to enjoy the preferential duties, it must fulfill the Rules of Origin (ROO) criteria under MICECA.

  • Products listed under India’s Exclusion List (EL) do not qualify for duty reduction or elimination under MICECA. The Indian importer would need to pay the duty based on the current MFN rate.

 

Importing from India

  • If you are importing from India, please click this link to check on the preferential duties under MICECA:

Malaysia - Schedule of Tariff Commitments

  • Nevertheless, in order for the product to enjoy the preferential duties, it must fulfill the Rules of Origin (ROO) criteria under MICECA.

  • Products listed under Malaysia’s Exclusion List (EL) do not qualify for duty reduction or elimination under MICECA. The Malaysian importer would need to pay the duty based on the current MFN rate. Kindly click this link for Malaysia’s EL:

Malaysia - Exclusion List 

RULES OF ORIGIN

In order for your product to enjoy the preferential duties, it must fulfill the Rules of Origin (ROO) criteria under MICECA which are:

  • It must be wholly obtained from the country of origin; OR

  • It has undergone substantial transformation in term of change of tariff classification in the subheading at the six digit level of the HS (CTSH); AND

  • Qualifying Value Content of not less than 35% of the FOB value.


Interested parties can review the specific rules related to your product in the following links.

List of Products under the Product Specific Rules

Procedure and Verification

Sample of the Certificate of Origin (CO) Form - Form MICECA (Annex 3-3.1 Certificate of Origin)

SERVICES

  • India has committed to allow Malaysian foreign equity shareholding ranging from 49 to 100% in 84 services sub-sectors, including in professional services, healthcare, telecommunications, retail and environmental services.  In return, Malaysia has made commitments to allow Indian foreign equity shareholding in 91 services sub-sectors. 

  • MICECA also contains a dedicated chapter that facilitates the temporary entry of installers and servicers, contractual service suppliers, independent professionals and business visitors (including potential investors) from Malaysia into India, and vice versa. 

CONTACT US

For Preferential Certificate of Origin / Rules of Origin related matters, please contact:

  1. Ms. Suhaili Ismail
    DL: 03 - 6208 4717
    Email: suhaili.ismail@miti.gov.my / allofficerskpi@miti.gov.my
    Division: Trade and Industry Support
     
  2. Ms. Shazila Sharudin
    DL: 03 - 6208 4727
    Email: shazila@miti.gov.my / allofficerskpi@miti.gov.my
    Division: Trade and Industry Support

 

For other enquiries, please contact the FTA focal point(s) as follows:

  1. Ms. Aida Syukrena Mohd Idris
    DL: 03 - 6200 0565
    Email:  aidasyukrena@miti.gov.my

 

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