KUALA LUMPUR: Malaysia and India announced on Wednesday that a long delayed trade accord between the two countries would take effect by July 2011, doubling two-way trade to $15 billion by 2015.

“I’m glad to officially announce that the agreement will come into effect in 2011. That will signify a huge strategic move... and establish a strategic and stronger bilateral relationship,” Prime Minister Najib Razak told a joint news conference after a meeting Indian counterpart Manmohan Singh.

“I’m very confident when this agreement comes into force, the trade targets that we have set, which is basically 15 billion dollars by 2015, will be attained if not earlier,” Najib said.

The Comprehensive Economic Cooperation Agreement (CECA) will cover trade in goods and services, investment and economic cooperation and will be signed by the two sides by January, according to a joint-statement.

Negotiations on the pact began in February 2008 but were put on hold after two rounds of talks before resuming early this year.

India was Malaysia’s 12th largest trading partner in 2009. Two-way trade peaked in 2008 at $10.52 billion but fell to $7.06 billion in 2009 due to the global economic downturn. Singh said: “I’m confident this agreement will transform our economic engagement in a very substantial way.” India has invested in 95 projects in Malaysia’s manufacturing sector worth $1.1 billion, creating 13,032 jobs.

Singh was later greeted with much fanfare at the launch of a district dubbed “Little India” in the Malaysian capital, which he hailed as a recognition of Malaysia’s ethnic Indians contributions to the country.

“Malaysian Indians are well placed to be the bridge of understanding between Malaysia and India,” the Indian premier said as he was garlanded with a shawl and flowers as a welcome to the event.

Amid a fusion dance of Malaysia’s various cultures and a classical Indian dance performance, Singh and Najib launched “Little India” which includes a landmark water fountain, restored building facades and broadened walkways. Both leaders played down concerns about discrimination against Malaysia’s ethnic Indian minority, who say they fare badly in terms of education, wealth and employment opportunities.

Ethnic Indians make up less than eight percent of Malaysia’s 28 million population, which is dominated by Muslim Malays, who are given preferential treatment under a government affirmative action policy.

Five ethnic Indian activists were held by police in 2007 for up to two years after mounting an unprecedented mass rally alleging discrimination.

“I’m confident that the Malaysian system has a built-in flexibility to tackle the problem. I have no reason to be apprehensive of the future of the Indian community in this great country,” the Indian premier said.

Najib said the issue was “a purely domestic matter for Malaysia” and the government was handling it “in a positive way”. The visit is part of Singh’s three-nation Asian tour that includes Japan, Malaysia and Vietnam. He will leave for Vietnam on Thursday to take part in the Eighth India-ASEAN Summit and Fifth East Asia Summit on Oct 30.—AFP