Kathmandu. India and Malaysia on Sunday pledged to deepen their partnership in the semiconductor sector during Prime Minister Narendra Modi’s visit to Malaysia.

At a time when Indian Ocean neighbours are moving towards expanding trade and security ties, the two countries have signalled that they will give priority to technology-based cooperation.

Prime Minister Narendra Modi arrived in Malaysia on Saturday. This is his first visit in more than a decade. During the visit, he signed a number of agreements with Malaysian Prime Minister Anwar Ibrahim in the areas of renewable energy, healthcare and artificial intelligence (AI).

Prime Minister Modi said that along with AI and digital technology, we will also take forward partnerships in semiconductors, health and food security. “These areas are of long-term strategic importance for both countries,” he said.

Prime Minister Anwar Ibrahim described the meeting between India and Malaysia as “very important and strategic”. Speaking at a press conference held in Putrajaya, the administrative capital of Malaysia, he expressed his confidence that the visit would further strengthen and promote the relations between the two countries.

According to the Malaysian government’s data, Malaysia is the sixth largest exporter of semiconductors worldwide. The sector accounts for about 25% of Malaysia’s GDP, illustrating its economic importance.

India’s Ministry of External Affairs (MEA) has said that Malaysia has a strong semiconductor ecosystem with the Southeast Asian nation. According to the ministry, Malaysia has about 30 to 40 years of experience in this sector, which can create useful opportunities for India.

The ministry also said that Indian companies are willing to collaborate with Malaysia in areas ranging from R&D to construction and testing plants. For example, Indian and Malaysian media reported that Tata Electronics was in talks with global semiconductor companies to buy fabrication or outsourced semiconductor assembly and testing plants in Malaysia in June.

Last year, India exported goods worth $7.32 billion to Malaysia, mainly in engineering and petroleum products, according to the India Brand Equity Foundation. Likewise, imports of minerals, vegetable oil, electrical machinery and equipment worth $12.54 billion from Malaysia to India.

Malaysia also has a large population of people of Indian origin. According to official figures, about 3 million people of Indian origin, or about 6.8 percent of the total population, are of Indian origin.

Prime Minister Modi described this diaspora as a “living bridge” between India and Malaysia and said that their role is very important. He expressed confidence that the steps taken for the welfare of the Indian diaspora would provide a humanitarian basis to the relations between the two countries.