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Vajpayee starts Malaysia trip, deals eyed

Prime Minister Atal Bihari Vajpayee is on a three-day visit to Malaysia during which he is due to sign a raft of economic agreements and hold talks with Prime Minister Mahathir Mohamad.

Vajpayee arrived in Kuala Lumpur on Sunday evening, along with his Information Technology Minister Pramod Mahajan and a 75-member business delegation.

The leader of the world's largest democracy, Vajpayee will be welcomed on Monday morning by Mahathir, Asia's longest-serving elected leader, at the new administrative capital of Putrajaya on the outskirts of Kuala Lumpur.

An Indian government official said he expected the visit to boost economic relations.

"I think bilateral relations are at a stage of take-off. Economic reforms in India have opened up new avenues for investment," Indian High Commissioner to Malaysia, Veena Sikri, said.

Analysts say India, which has opened its doors to foreign business, is keen to woo investment, more of which has traditionally flowed to neighbouring China and other east Asian countries.

Officials said that India and Malaysia will sign a deal on Monday whereby New Delhi would accept palm oil as payment for carrying out a $1.5 billion railway project in Malaysia.

"The overall value of this project is expected to be over $1.5 billion, the largest ever to be awarded to an Indian company abroad," according to a document summarising agreements due to be signed between the two countries.

A copy of the text was obtained by Reuters.

"It is to be signed on Monday and it will be on a counter-trade basis," an Indian official said. Malaysia, the world's top palm oil producer, has offered New Delhi a contract involving the dual tracking and electrification of rail lines from northern Ipoh city to Padang Besar at the border with Thailand, in return for India buying more palm oil.

The two countries will also sign an agreement to waive visa requirements for their diplomats and government officials.

"Another memorandum of understanding which will allow Malaysian firms to invest, construct and manage sea ports in India will also be signed," the Indian official said.

India, an emerging global computer software power, will be looking to take advantage of Malaysia's infrastructure facilities in its high-tech Multimedia Super Corridor, industry leaders said.

Minister for Information Technology Pramod Mahajan and Malaysia's Communication Minister Leo Moggie will seal an agreement to boost IT cooperation and jointly explore third country markets in the region.

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