External Affairs Minister Sushma Swaraj on Saturday called on visiting Malaysian Prime Minister Najib Razak.
This will be his third visit to India as Prime Minister, the last one was in 2012.
Malaysian Prime Minister Najib Tun Abdul Razak was on Saturday accorded a ceremonial welcome at the Rashtrapati Bhawan here.
Speaking at a joint interaction with leading South Indian chambers of industry here, the visiting prime minister said with Malaysia's highly diversified economy, strong manufacturing foundation, developed infrastructure and connectivity that meets global standards, there is enormous potential for further cooperation between both countries.
On the economic side, Modi said both countries "have built a thriving economic partnership".
Analysts said ties between India and Malaysia have improved in recent years giving economic cooperation stronger roots.
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There is also considerable potential for collaboration in defence production especially under the Make in India initiative.
Indian firms have moved to Malaysia in a big way, making it a base to do business with other Asean countries. As part of his two-day visit, he is believed to have met Governor C. Vidyasagar Rao and Tamil Nadu Chief Minister Edappadi Palaniswami.
Mr Najib is expected to sign at least five projects worth more than US$5.3 billion (S$7.4 billion) during the visit, including the proposed development of an urea and ammonia manufacturing plant in Malaysia.
"I am confident that this visit will enhance our bilateral relationship to a higher level", he said. He said, Malaysia wants to raise relations to new heights.
Rizal's statement came in response to news reports quoting Indian news portal, The Telegraph, which claimed to have sighted Najib's "minute-to-minute programme" in India.
"Many ideas were exchanged during our roundtable session, and many (of them) also expressed interest in investing in Malaysia". The official pointed out that Malaysian investment to India is around six billion dollars and India's investment is 2.5 billion dollars.