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Working towards accepting India’s UPI, RuPay payment service: Malaysian FM

Nov 08, 2023 12:48 PM IST

Malaysia is working towards accepting India's UPI system and RuPay payment service to boost commerce. The two countries are also exploring trade settlement in domestic currencies. Additionally, they are looking to enhance defence and security cooperation, including collaboration between defence industries and joint military exercises. Malaysia also thanked India for supplying rice during a recent shortage.

New Delhi: Malaysia is working towards accepting India’s Unified Payments Interface (UPI) system and RuPay payment service and the two countries are looking at trade settlement in domestic currencies to boost commerce, Malaysian foreign minister Zambry Abdul Kadir has said.

Malayaisn foreign minister Zambry Abdul Kadir with his Indian counterpart, S Jaishankar in New Delhi. (@ZambryOfficial (X))
Malayaisn foreign minister Zambry Abdul Kadir with his Indian counterpart, S Jaishankar in New Delhi. (@ZambryOfficial (X))

The two countries are exploring ways to ramp up defence and security cooperation, including collaboration between defence industries, training of military personnel and joint exercises, Kadir told HT late on Tuesday night after co-chairing a bilateral Joint Commission Meeting (JCM) with his Indian counterpart S Jaishankar.

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The JCM met after a gap of 12 years and the two sides focused on new areas of cooperation in sectors such as semiconductors, electronic and electric products, fintech, green technology and startups, he said. Kadir, who visited New Delhi for the first time in his capacity as foreign minister, also thanked the Indian side for supplying 170,000 tonnes of non-basmati white rice to help Malaysia overcome a recent shortage.

“Our Bank Negara Malaysia is working towards accepting UPI. This is an important step. I checked with Bank Negara and they are looking forward to that, they don’t see any problems in doing that,” Kadir said, referring to his country’s central bank.

Malaysia also has no problem with India’s RuPay payment service, and the two sides only need to “work through the technical aspects and the software”, he said.

“Trade settlement in domestic currencies is another way forward for trade between the two countries,” he said, adding that Malaysia already has such arrangements with Thailand and Indonesia. “Now, we have proposed it to India. The Indian side is also quite receptive to this,” he said.

Kadir said certain quarters may “question this move as de-dollarisation”, but Malaysia wants to see how the two countries can benefit by using local currencies for trade settlement. “At the same time, we strengthen the local currencies of both countries...The values of the local currencies will be maintained. There will not be fluctuations[and] movement all the time. We also stabilise the currencies,” he said.

Kadir didn’t refer to specific Indian defence platforms or weapons systems that could be of interest to Malaysia but said the two sides had committed themselves during the discussions on Tuesday to strengthen cooperation in defense industry, training and bilateral exercises.

He noted that India’s state-run Hindustan Aeronautics Limited has established an office in Malaysia and defence minister Rajnath Singh had visited the country in July. “It helped provide more opportunities for both countries to work together. This is a very good beginning for both sides to work, especially in the [defence] industry,” he said.

However, cooperation between the defence industries requires detailed analysis of technical capabilities that will “involve several parties and then it will take a longer time to come to terms”, he said. “This that doesn’t mean that Malaysia would not consider Indian defence systems or defence equipment at all. I believe Malaysia would be able to look into this. We must not look at this as a form of rejecting anything that comes from India,” he said.

Kadir emphasised the importance of cooperation in agriculture and food security, and said he had conveyed Malaysia’s appreciation for the Indian government’s decision to provide 170,000 tonnes of non-basmati rice last month, when his country was facing a shortage. “We remember what India has done to help us alleviate the critical issue we were facing,” he said.

He was more guarded in responding to a question about India’s demand for the extradition of fugitive Islamic preacher Zakir Naik, who has been living in Malaysia since 2016. Naik is wanted in India for alleged involvement in money laundering and inciting extremism through his hate speeches.

Kadir said the two sides discussed security cooperation in broader terms during the JCM. “We discussed [how] we need to study, to look into our security cooperation...it not only involves a personality but it must involve the whole, entire system, how the two countries can work together,” he said.

There are “many ways and areas” where the two sides need to improve relations, including the transfer of prisoners and human trafficking. He acknowledged there are “a number of loopholes which require both countries to work together”. Kadir added, “We emphasised more in terms of the system, rather than looking into [an individual] because when we have this JCM, such meetings are more about more comprehensive matters.”

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