India and Malaysia are looking to sign a bilateral pact on liberalising trade in goods, services and investment in October this year. Malaysia trade minister Datuk Mustapa Mohamed outlined the future course of trade relations between the countries in conversation with ET’s Amiti Sen. Excerpts:

Is the India-Asean free trade agreement delivering results?

We got good response from people who have started using the new provisions under the agreement. There aren’t enough numbers yet to tell the whole story. The potential, however, is good as it will gradually remove tariffs on 70% of the traded items. This will definitely boost trade ties between India and the region. Malaysia is one of the four Asean members that have ratified it so far.

India and Malaysia are also negotiating a comprehensive economic cooperation agreement....

Asean is a 10- member group with different levels of ambitions. We are engaging in a bilateral CECA with a higher level of ambition. I met commerce and industry minister Anand Sharma today and we have set deadlines for taking the agreement towards completion.

When will you be able to implement the CECA?

We will have a trade negotiations committee (TNC) meeting between March 29 and 31. We have set up eight working groups to discuss all issues. I and my counterpart will meet later this year to review its progress. We hope that the agreement will be ready to be signed during the Asean Summit, which will be held in the third week of October in Hanoi. We want your Prime Minister to be there for the signing. However, to achieve that the negotiations have to be completed by August.

While the India-Asean FTA was being negotiated, you had problems with duties on some products such as palm oil and rubber.

The principle guiding the CECA is that the level of commitment has to be higher than that in the Asean agreement. Otherwise there is no use having a bilateral.

Malaysian car maker Proton has been wanting to set up operations in India. At what stage are its talks with Indian partner?

We are hopeful that the deal will be completed this year. It is another area that will promote closer ties between India and Malaysia. It will encourage more such ventures.

Is Malaysia comfortable with idea of more Indian professionals coming to the country once the services and investment agreement comes into place?

That is the way forward. The labour market is going to get more and more open. And to succeed you need to attract the best talent. It is more about exchange of talent. We want to attract talent that is not available in Malaysia, for example in the IT sector. We want to facilitate movement of professionals by sorting out problems in areas such as work-permits. Some sectors are already open including IT and to some extent financial services. On the other hand, we also have Malaysians working in other countries including India.

The multilateral trade negotiations at the World Trade Organisation have been static for quite some time. What do you think is required to set the ball rolling again?

The mini-ministerial in Delhi in September last year provided an impetus to the Doha round of WTO talks. Unfortunately, nothing materialised in the Geneva meeting in December. Problems remain between major countries. We are not hopeful that it will be concluded by the end of this year.