Indian investments in Malaysia are expected to surge with trade pacts expected to be

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inked between the two sides later this year, a Malaysian minister has told a newspaper.

"Although it is still early to tell and, given the level of more business to business engagements between our two countries, we are hoping to see more MoUs", Malaysian Trade minister Mustapa Mohammad told Business Times here.

India Prime Minister Manmohan Singh will be visiting to Malaysia in September and is expected to sign the Comprehensive Economic Cooperation Agreement (CECA) for opening up bilateral trade in goods and services, besides various avenues of investment.

Malaysian Prime Minister Najib Abdul Razak's visit to India in January was described by business communities as a shot in the arm with 18 agreements signed during the trip.

"Potential investments from the January visit is estimated at 1.1 billion ringgit (1 USD=3.2 ringgit).Since they were signed only six months ago, the projects are mostly at the early stages of implementation", it said.

The 18 MOUs, signed by both the countries in January, targetted services sector, aviation industry, biotechnology, infrastructure, petroleum and gas, education and multimedia sector.

Mohammad said free trade agreements will raise the interest of the private sector in both the countries. The Asean-India FTA on goods, which came into effect on January 1 saw 4,399 COs (Certificates of Origin) issued until June.

"There has been increasing interest in the AIFTA since it was concluded in 2009. I believe the private sector views the FTA as a means to gain better access to the promising Indian market", the minister said noting that although it was premature to determine the impact of the Asean-India FTA, total bilateral trade had improved by 11.9 per cent to USD4.23 billion from January to May.

"If this trend continues, we are targeting for bilateral trade to grow by 20 per cent in 2010 over the previous year", he added. India is Malaysia's largest export destination in South Asia, with 100 Indian companies operating on its shores compared to the 3,000 operating in neighbouring Singapore.

"We hope that with the conclusion and implementation of the Asean-India FTA in services and investments and CECA, we will be able to see an increase in the number of Indian companies operating in Malaysia", the minister said