For Malaysia and other Southeast Asian states, this process has practical implications. India is becoming a central figure in their economic and geopolitical interests, providing support in areas such as economic stability, security, food and energy supply, access to technology, and strategic maneuverability.
Thus, Prime Minister Narendra Modi's visit to Malaysia on February 7-8 holds strategic significance for both nations. For Kuala Lumpur, it is an opportunity to transition from traditional balancing to recognizing India as one of the key strategic partners for decades to come.
The Indian Economic and Demographic Miracle
According to estimates from the International Monetary Fund, India continues to be the fastest-growing major economy in the world, with expected real GDP growth of around 6.4%, while many developed and developing countries barely reach 3%.India's nominal GDP has already surpassed $4 trillion. According to forecasts from the IMF and the World Bank, India is poised to overtake Japan and Germany in this decade and become the largest economy on the planet by 2040.
This trajectory is based on real factors: a vast domestic market continues to grow, the demographic structure remains favorable, government investments are increasing, industrial production is expanding, and the development model is gradually shifting from consumption to investment and productivity enhancement.Over the past decade, especially under Modi, India has implemented structural reforms that many major democracies have failed to achieve: the introduction of a Goods and Services Tax, the unification of bankruptcy procedures, the creation of digital financial platforms, and the implementation of large-scale infrastructure projects. These measures have strengthened institutions, reduced transaction costs, and improved capital allocation.
India's demographic situation continues to contribute to the growth of its national power, while China is experiencing stabilization. Despite Beijing's influence, the Chinese economy is facing structural slowdown: high debt levels, real estate market issues, and demographic decline create risks.
According to World Bank forecasts, China's growth rate is expected to decrease from 4.9% in 2025 to 4.4% in 2026 and 4.2% in 2027, which is part of an overall long-term cooling of the economy.
Against this backdrop, India's rise becomes not just an economic event but also a significant factor of "hard" power, creating a counterbalance without direct confrontation.
The "Act East" and "Make in India" Strategies: Benefits for Southeast Asia
The "Act East" strategy, launched in 2014, has solidified India's status as a key power in the Indo-Pacific region with long-term interests in the security and prosperity of Southeast Asia. It not only deepens integration and transport connectivity but also contributes to strengthening the regional balance by expanding the country's economic-defense "umbrella."This policy effectively brings ASEAN back to the center of strategic discussions—from the Andaman Sea to the Malacca Strait—creating space for India's active participation and providing an additional sense of confidence amid rising tensions.
While "Act East" expands India's strategic depth, another initiative, "Make in India," enhances its economic significance.
Together, they create synergy: India becomes a market, a manufacturing base, and a security provider.The industrial policy strengthens the economic foundation by reducing dependence on services and consumption. A more robust manufacturing ecosystem creates alternative production centers and strengthens regional supply chains.
The Digital India program completes the technological transformation, shaping one of the most scalable digital economies in the world. It reduces transaction costs, expands financial accessibility, supports small businesses, and accelerates the adoption of technologies in AI, fintech, and e-governance.
For Malaysia and ASEAN countries, this opens up new opportunities for affordable digital inclusion, fintech development, and cybersecurity, as well as building infrastructure for digital trade.
Today, India has over 200,000 startups covering areas from fintech and medical technologies to defense solutions and space projects, making it one of the largest innovation ecosystems in the world.
Particular attention to strategic sectors such as semiconductors opens new opportunities for Malaysia, which is an important hub in the global chip manufacturing chain. The partnership between the countries does not duplicate but 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 future markets for renewable energy, storage systems, green hydrogen, and modernization of power grids. This creates opportunities for joint investments, technology transfer, and supply chain diversification.
This cooperation allows Malaysia to move up the value chain, avoid the "middle-income trap," and attract quality investments.
As a notable example, in 2024, India allowed a one-time shipment of 200,000 tons of non-basmati rice to Malaysia, making an exception to export restrictions, confirming India's readiness to be a stabilizing partner during market fluctuations.
Deepening Trade Relations
Over the past decade, the volume of bilateral trade has nearly doubled, reaching about $19-20 billion per year. Malaysia has become one of India's main partners in ASEAN, while India is a key 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.
It is noteworthy that India consistently remains one of the largest buyers of Malaysian palm oil, ensuring stable demand in the market, while the supply of Indian medicines enhances 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.
Human Connections and "Soft Power"
The relationship between the two countries is built not only on economic and political factors but also on a strong social foundation—tourism, culture, education, and scientific cooperation.The popularity of Bollywood, language, and educational ties have long intertwined these countries. 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 leading countries in the world in the number of graduates in STEM fields, and its startup environment fosters the exchange of talent and knowledge.
Stabilizing Military Power
Amid growing threats, a more active role for India could strengthen stability in the region. During Modi's tenure, the country's military power has significantly increased: India has transformed from a predominantly defensive force into a significant deterrent factor in the Indo-Pacific region.India is among the top five countries with the highest military expenditures—over $80-90 billion per year.
The country's naval forces possess two aircraft carriers, as well as a developing fleet of destroyers, frigates, and submarines with ballistic missiles. A constant presence in the Indian Ocean, Andaman Sea, and near the Malacca Strait underscores India'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 combination of naval and air power allows India to project strength, ensure the security of trade routes, and provide strategic deterrence, which is critically important for a region dependent on open sea and air routes.
Joint exercises enhance the interoperability of the armed forces and readiness for common challenges.
A Common Future
India's role in today's world and in the future is becoming increasingly important. Its rise coincides with China's economic slowdown, gradually changing the balance of power in Asia.For Malaysia, the question is not about choosing between India and other powers but about preparing in advance for its strengthening or reacting post-factum.
Modi's visit can be seen as a strategic turning point—the beginning of a new wave of partnership based on shared history, trust, and mutual goals. Deepening cooperation in areas such as defense, technology, energy, education, and culture is not only a sensible step but also the foundation for Malaysia's long-term prosperity, security, and strategic autonomy.
