CROSS CULTURAL IMPACT ON

TRADE RELATIONS OF INDIA &

MALAYSIA Presented by
Roopam Goyal
PGDM – A-35
Introduction

 Federal constitutional
monarchy
 consists of thirteen states
and three federal
territories.
 Is separated by the South
China Sea in two regions.
 Capital city is Kuala
Lumpur.
 Putrajaya is the seat of the
federal government
Geography
 A coastal Nation
 Covers an area of 329,733km2
 Coastal area are home to
more than 60% of the total
population
 Most coastal regions are low-
lying, areas that are less than
0.5m above the highest tide,
or are within 100m inland of
the high-water mark, would
be especially vulnerable to
sea-rise.
People
 Multi-ethnic & Multi-cultural society
 The population estimate is
28,310,000
 Malays(50.4%), Chinese(23.7%),
Indian (7.1%), other indigenous
people(11%) and others (7.8%)
 81% lived in Peninsular Malaysia, with
19% living in Sabah and Sarawak.
 Rate of unemployment is just 0.4%
which is comparatively lower than
other countries.
Malay Culture & Society
 A multi-cultural society but despite
the ethnic differences there are
commonalities culturally speaking.
 The family is considered the centre of
the social structure. As a result , a
great emphasis on unity, loyalty and
respect for the elderly.
 Malays, Chinese and Indians all strive
to maintain face and the desire to
maintain face makes Malaysians strive
for harmonious relationships.
Etiquettes & Customs

 Greetings in a social context will depend upon the ethnicity of the

person you are meeting.
 In general, most Malays are aware of Western ways so the handshake is
normal.
 Malay women may not shake hands with men. Men may also not shake
hands with women and may bow instead while placing their hand on
their heart.
 The Chinese handshake is light and may be rather prolonged.
 When being introduced to someone of the opposite sex, nodding the
head and smiling is usually sufficient.
 Among all cultures, there is a general tendency to introduce:
  the most important person to the lower ranking person.
  the older person to the younger person.
  women to men.
Business Etiquette

 Meetings & Greetings

 Initial greetings should be formal and denote proper respect.
 If in a team, introduce the most important person first.
 It is important that professional titles (professor, doctor, engineer) and
honorific titles are used in business. Malays and Indians use titles with
their first name while Chinese use titles with their surname.
 Business Card Etiquette
  If you will be meeting government officials, have one side of your card
translated into Bahasa Malaysia.
  Examine any business card you receive before putting it in your
business card case.
  The respect you show someone's business card is indicative of the
respect you will show the individual in business. Act accordingly.
 Communication

 As an extension to the need to

maintain harmonious relations,
Malaysians rely on non-verbal communication.
 Malays may hint at a point rather than making a direct statement, since
that might cause the other person to lose face.
 They may have someone else give you the bad news.
 Silence is an important element of Malaysian communication. Pausing
before responding to a question indicates that they have given the
question appropriate thought and considered their response carefully.
 Many Malaysians do not understand the Western propensity to respond
to a question hastily and can consider such behavior thoughtless and
rude.
 Do not show anger in public as it makes Malaysians uncomfortable and
creates a feeling of powerlessness.
Business Meetings
 Most senior person on team should
enter first so that he/she is the first
to greet the most senior Malaysian.
 This gives face to both parties as it demonstrates respect towards the
Malaysian and shows that you respect hierarchy within your company. 
 Customary for leaders to sit opposite each other around the table. 
  Expect the most senior Malaysian to give a brief welcoming speech.
You need not reciprocate.
  Meetings may be conducted or continue over lunch and dinner. 
  At the first meeting between two companies, Malaysians will
generally not get into in-depth discussions.
 They prefer to use the first meeting as an opportunity to get to know
the other side and build a rapport, which is essential in this consensus-
driven culture.
Major Sectors of Malaysian
Economy
 Mining Industry
 Banking & Finance
 Tourism
 Manufacturing
 Exports & Imports
 Doing Business in Malaysia
 Welcomes foreign investments, particularly in the
manufacturing sector.
 Does not discriminate against investors from any
country.
 Offers incentives and other advantages to foreign
investors
 has entered into double taxation agreements with
more than 40 countries.
 Has investment guarantee agreements with most
major industrialized countries that except for public
purposes, Malaysia will not expropriate or
nationalize property without prompt and adequate
compensation.
 For an individual who is not a Malaysian citizen
exercising an employment in Labuan with an
offshore company in a managerial capacity, 50% of
his income from such employment will be exempted
from tax up to the year of assessment 2004.
Trade relations between India
& Malaysia
  India is Malaysia's largest
trading partner
 while Malaysia is India's
second largest trading
partner in the (ASEAN)
 61 joint ventures in sectors
ranging from palm oil
refining, power, railways, civil
construction, training and IT.
 67 Indian IT companies enjoy
Multimedia Super Corridor
(MSC) status in Malaysia.
Trade Estimates

 In 2006, India-Malaysia trade reached a record

US $ 6.58 billion, registering a growth of
approximately 22.84% over the previous year and
ten times the amount that existed fourteen yeas
ago.
 Malaysia has traditionally enjoyed a handsome
surplus, of between US $ 1 billion to US $ 1.5
billion, in its trade with India.
 India's exports have increased by 98 % from US $
672.5 million in 2003 and US $ 1.3 billion in 2004.
Recent developments

 India is well placed to participate in Malaysia's evolution

to a high-value economy with investments in knowledge-
and technology-based industries, says Dato' Sri Mohd
Najib Tun Abdul Razak, Prime Minister of Malaysia.
 Increased economic ties between Malaysia and India for
the mutual benefit.
 Malaysia wants to attract the knowledge workers and
wants to be plugged into the global supply chain. In this
regard, Indian companies are well placed to play their
part in new technology industries such as biotechnology
and renewable energy.
Cooperation Pact

 The Comprehensive Economic Cooperation

Agreement (CECA) is a key factor in strengthening the
ties.
 The free trade agreement with ASEAN enables
greater integration between two economies within
Asia that will be the areas of significant growth.
 India should focus on business links primarily trade
and investments, as well as flow of people and people-
to-people relations including through tourism,
movement of knowledge workers, training, education
and skill development.
Objective Rating
 The next level of relations between India and Malaysia would be to
get involved in more sophisticated industries that reflect the
majority of economy.
 Key area for Indian companies to tap funds in the Malaysian market
would be an ‘objective rating' since cost of funds depend on it. If the
rating system is good then the markets will respond more positively.
 Investment opportunities for industries on both sides are huge
because today the arrangement are multifaceted covering a wide
range of areas including animation, movies, oil and natural gas and
real estate, apart from traditional areas like construction that
Malaysian companies are involved in.
 Both the countries are planning to work together to exploit
opportunities in third markets.
New Visa regime

 To facilitate the movement of people and interaction,

Malaysia will soon have a new visa regime which will be able
to identify bonafide tourists and business travelers – the
ones we will facilitate.
 The education sector too will see significant collaborative
effort. There is a fair number of students both ways even
now.
 The way has been cleared for one education institution to
set up a distance learning centre – a virtual campus -- in
India.
 More collaboration between Malaysian and Indian
institutions.
THANK YOU