New Era of Cooperation: India and Malaysia Launch Digital Council and Payment Linkages
New pacts facilitate seamless cross-border payments for tourists
Bilateral relations took a significant leap forward on Sunday as India and Malaysia committed to integrating their economic systems more closely than ever before. Following Prime Minister Narendra Modi’s visit to Malaysia, hosted by Prime Minister Anwar Ibrahim, both nations announced the formation of the Malaysia–India Digital Council (MIDC). This strategic move aims to revolutionize day-to-day commerce and hardwire the partnership between the two Asian economies.
Seamless Payments and Fintech Innovation
Central to this announcement is the push to strengthen India-Malaysia digital ties through financial technology. The leaders endorsed a critical collaboration between NPCI International Limited (India) and PayNet (Malaysia). This partnership is designed to link their respective payment networks, creating a system that allows for seamless, low-cost cross-border transactions.
For tourists, students, and small business owners, this is a game-changer. It promises to make remittances and travel spending as frictionless as domestic transactions. Furthermore, the MIDC will serve as a launchpad for deeper cooperation in cutting-edge fields such as artificial intelligence, cybersecurity, e-governance, and Digital Public Infrastructure.
Boosting Local Currency Trade
Beyond technology, the joint statement emphasized a shift toward financial self-reliance. Both governments are encouraging the settlement of trade using the Indian Rupee and Malaysian Ringgit. This initiative builds upon existing frameworks between the Reserve Bank of India and Bank Negara Malaysia, aiming to insulate bilateral commerce from global currency fluctuations and reduce transaction costs.
Semiconductors and Energy Security
The scope of the partnership extends well beyond the digital realm. Recognizing the strategic importance of hardware, both leaders agreed to deepen cooperation in the semiconductor sector. The focus will be on strengthening the value chain, fostering technological innovation, and ensuring supply chain stability.
Energy cooperation also took center stage, particularly in renewables. Companies like PETRONAS and Gentari were highlighted for their active role in India’s green hydrogen and renewable energy sectors. Both nations expressed a strong desire to expand solar initiatives aligning with their respective net-zero climate goals.
Food Security and Defence
On the agricultural front, Malaysia reiterated its commitment to being a reliable supplier of sustainable palm oil to India. Both sides agreed to address market access issues through structured engagement, ensuring food security remains a priority.
Security and defense collaboration remains a pillar of the relationship. The leaders condemned terrorism in all forms and discussed the upcoming Harimau Shakti joint military exercise scheduled for December 2025 in Rajasthan. On the global stage, Malaysia welcomed India’s chairmanship of BRICS in 2026, signaling a shared vision for a multipolar world order.
