Will a New Government in Malaysia Reset India Ties?

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Will a New Government in Malaysia Reset India Ties?

The Muhyiddin government seems keen to thaw the ice, but there are major pitfalls ahead.

Will a New Government in Malaysia Reset India Ties?

Prime Minister Narendra Modi meets with then-Prime Minister of Malaysia Mahathir Mohamad in Vladivostok, September 5, 2019.

Credit: Indian Ministry of External Affairs

India’s relations with Malaysia took a downward path under the previous Pakatan Harapan (Alliance of Hope) government headed by Mahathir Mohamad. Deviating from Malaysia’s usual policy of maintaining neutrality in the internal affairs of its strategic partners, Mahathir adopted an aggressive stance vis-à-vis Indian policies such as the revocation of Article 370 in Jammu and Kashmir and the Citizenship Amendment Act (CAA). With the new coalition Perikatan Nasional (PN) government headed by Prime Minister Muhyiddin Yassinin now in power in Malaysia, there is already an indication of thawing relations between India and Malaysia.

However, in the coming years, the road to harmony in the India-Malaysia relationship is full of pitfalls. The resumption of the previous warmth in relations between India and Malaysia largely depends on the new government’s ability to maintain neutrality in India-Pakistan disputes. Also, the PN government will need to resist using Islamic rhetoric in its foreign policy to assuage its domestic audience, since doing so has the potential to complicate its relations with other countries, such as India. For the PN coalition, which includes the extreme right Parti Islam Malaysia (PAS), it will be a fine line to walk.

India-Malaysia Spat

Adopting an unusually harsh stance toward India’s Citizenship Amendment Act (CAA), then-Prime Minister Mahathir said that New Delhi was trying to “deprive some Muslims of their citizenship.” Similarly, at the UN General Assembly (UNGA) meeting in September 2019, he alleged that India has “invaded and occupied“ Kashmir. India retaliated by unofficially asking importers in the country to avoid purchases of palm oil from Malaysia. New Delhi also reduced the import duty on refined palm oil to regulate the import of palm oil from Malaysia.

It is important to note that Malaysia is the second-largest producer and exporter of palm oil in the world, and India is the third-largest importer of Malaysian palm oil.

In 2018, the palm oil sector in Malaysia was the most prominent employment provider in a country of 32 million people, with a share of 2.8 percent in the country GDP, and constituting 4.5 percent of total exports. Consequently, as the third-largest market for Malaysian palm oil, India’s decision to reduce imports significantly hurt the Malaysian palm oil sector. According to reports, in January 2020, India’s palm oil imports from Malaysia dropped to 46,876 tonnes, the lowest mark since 2011. The vacuum left by India’s withdrawal from the Malaysian palm oil market was soon filled by Pakistan, which increased its palm oil import to 170, 802 tonnes from 80,660 tonnes a year earlier.

Mahathir’s Policy: Instrumentalizing Religion in Foreign Policy

In 2018, Mahathir’s PH alliance came to power by allying with the Chinese and Indian ethnic minorities in the country. PH’s promise of inclusivity in political and socioeconomic policies offered an invigorating substitute to the race-based identity politics that have corrupted the Malaysian political system since independence. After winning the 2018 elections, the PH alliance challenged the race-based chauvinism prevalent in Malaysian politics. It is an unspoken norm in Malaysian politics that the members of the Malay race must occupy all the high-profile portfolios in the government. Contrary to this understanding, the PH alliance allocated the position of finance minister to a politician of ethnic Chinese origin, Guan Eng, and the post of the attorney general to a Malaysian of Indian origin, Tommy Thomas. That created a sense of unease in the majority Malay community, who criticized the PH coalition for neglecting Malays’ interests.

In the next two years after the election, the PH coalition failed to live up to expectations and began losing support among all the communities alike, as indicated by the defeat of the PH coalition in five by-elections. To minimize the failure of the PH government’s domestic policies, Mahathir adopted an unusually aggressive stance in foreign policy. On the global stage, the erstwhile Mahathir government constantly appealed to the religious sentiments of Muslims as in the case of Kashmir or the CAA issue vis-à-vis India. He raised issues concerning the “Ummah,” forged trilateral cooperation with like-minded non-Arab Muslim states like Pakistan and Turkey, and stressed the need for unity in the Islamic world. By resorting to Muslim identity politics using global platforms, Mahathir instrumentalized religion to appease the Muslim Malay community at home, which had accused the PH coalition of not doing enough to protect the interests of Bumiputeras. The idea behind taking an Islamist approach in foreign policy was to carve a niche for Malaysia in the Muslim world and to portray Mahathir as the leader of the Islamic world at home and abroad.

Warming up to India: The PAS Hurdle for the New PN Coalition

The new coalition government in Malaysia, Perikatan Nasional (PN), headed by Prime Minister Muhyiddin Yassinin is made up of a loose coalition of parties. Parliamentarians from Parti Pribumi Bersatu Malaysia (PPBM) and Parti Keadilan Rakyat (PKR) united with the United Malays National Organisation (UMNO) and Parti Islam Malaysia (PAS). This coalition also received support from the Coalition of Sarawakian Parties (GPS). One of the first tasks of the PN government after assuming office was to reset Malaysia’s ties with India. The new foreign minister of Malaysia, Hishammuddin Hussein, met Indian High Commissioner Mridul Kumar, indicating the thawing of relations.

Although it is too early to predict the future course of India-Malaysia relations under the PN government, one of the apparent pitfalls ahead for both countries is the presence of Islamist party, PAS, in the ruling coalition in Malaysia. The PAS president, Hadi Awang, has already been appointed by Muhyiddin as the special envoy to Middle East, with the rank of a minister. It is highly likely that under PAS’s influence, the foreign policy of Malaysia will adopt an Islamist orientation and a more assertive approach toward Islamic issues than ever before.

Founded in 1951 as a splinter group from the UMNO, the PAS is influenced by Egypt’s Muslim Brotherhood and supports the goal of establishing an Islamic state in Malaysia. In 2005, during an event in London, the strong association between the PAS and Muslim Brotherhood became evident when Hadi shared the stage with Muslim Brotherhood scholar Sheikh Yusuf al-Qaradawi, one of the Brotherhood’s most controversial and prominent clerics.

The PAS is known to have an assertive stance on issues concerning Muslims worldwide. It has criticized the Indian government’s policies on Kashmir. Previously, the PAS has staunchly supported the Islamist preacher, Dr. Zakir Naik, against extradition requests from India. Hadi once said: “More than 1 million PAS members will not allow for Dr. Zakir Naik to be left alone, and trust us that Muslims from various parties and groups are together with us… the right of Muslim brotherhood comes before citizenship, and crosses the borders of countries and nations.” With the PAS now part of the ruling coalition, any attempt by Indian authorities to pursue Naik’s extradition with the Malaysian government will be futile. Furthermore, any incident of communal polarization in India will give more fodder to the Islamists in Malaysia, who in turn will pressure the Malaysian government to take a stand in favor of the Islamic Ummah. Such a stance by the Malaysian government will be seen as interference in internal affairs by New Delhi and will harm relations with India.


As a country where 7.2 percent of the population is of Indian origin, Malaysia assumes an important place in India’s foreign policy. Surrounded by busy sea lines of communications such as the Strait of Malacca and the South China Sea, Malaysia is also a key pillar of India’s Act East policy and critical to India’s maritime connectivity strategies. Previously, the relations between the two countries were complicated in the 1990s when the Malaysian government decided to support Pakistan’s position on the international stage. Nevertheless, both countries managed to overcome such thorny episodes in the past. However, at present, Malaysia is moving toward a more Islamist path. In the past few decades, the conservatism in the country has substantially increased. If domestic politics in Malaysia continue to move toward the far right and a looming ethnic schism, this will hurt the country’s relations with India.

Dr. Yatharth Kachiar is a Research Associate at the Vivekananda International Foundation (VIF). She holds a Doctorate from Jawaharlal Nehru University (JNU), New Delhi.