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THE Ministry of Investment, Trade and Industry (MITI) has welcomed its RM1.898 billion allocation under Budget 2026, affirming its commitment to spearheading the country’s industrial transformation and fortifying strategic sectors to ensure long-term economic sustainability for businesses, SMEs and the rakyat.
In a statement today issued following the Budget announcement, MITI highlighted that the allocation is in line with the MADANI Government’s dual economic goals of “raising the ceiling and lifting the floor” — a philosophy reflected across national strategies such as the New Industrial Master Plan 2030 (NIMP2030), the 13th Malaysia Plan (RMK-13), and the broader MADANI economic framework.
“The Budget 2026 measures under MITI's purview will be implemented effectively and swiftly, particularly those that improve the quality of life for the rakyat and create more opportunities for SMEs,” said Minister of Investment, Trade and Industry, Tengku Zafrul Abdul Aziz.
Boosting Investor Confidence and Regulatory Reform
MITI reaffirmed its commitment to positioning Malaysia as a competitive investment destination through the full implementation of the new Outcome-Based Incentive Framework starting in Q1 2026 for the manufacturing sector and in Q2 for services.
In support of investor facilitation, the Investor Pass — led by MIDA — will provide a multiple-entry visa of up to 12 months, while the continuation of the Residence Pass – Talent Fast Track and the ASEAN Business Entity (ABE) status are expected to enhance Malaysia’s appeal to strategic investors and skilled talent.
MITI noted the complementary role of the Invest Malaysia Facilitation Centres (IMFC) established in Kuala Lumpur and Johor, and ongoing regulatory reform efforts under the National Competitiveness Committee. These reforms have helped Malaysia climb 11 places to 23rd in the IMD World Competitiveness Ranking 2025.
Securing Export Resilience Amid Global Trade Shocks
With Malaysia’s exports rising 3.8 per cent to RM1.977 trillion between January and August 2025 despite global trade headwinds, MITI underscored the importance of continued support for exporters. It welcomed the doubling of the Market Development Grant (MDG) allocation to RM60 million, which will assist SMEs entering new markets including Africa, Latin America and Central Asia.
The grant will now also cover new cost components such as logistics and in-store promotions abroad. Additionally, RM500 million in soft loans from EXIM Bank will support companies affected by global tariff tensions, enabling greater export diversification and SME resilience.
MITI further reiterated its encouragement for industry players to capitalise on the country’s 18 active Free Trade Agreements, including RCEP and CPTPP, while noting the upcoming conclusion of the Malaysia–Republic of Korea FTA negotiations.
Driving Strategic Sector Transformation: From Semiconductors to Halal Industry
The Ministry highlighted that semiconductor exports remain pivotal, accounting for around 30 per cent of total national exports, valued at RM287.3 billion for the first eight months of 2025 — a year-on-year growth of 17.3 per cent.
To advance Malaysia’s position in the global semiconductor value chain, MITI welcomed RM550 million in strategic investments from Khazanah and KWAP, RM500 million in funding from Bank Pembangunan Malaysia for local R&D, and MTDC’s new SemiconStart incubator programme. These complement existing initiatives such as IC MyChipStart and the Sama Jaya High-Tech Park.
For the aerospace sector, MITI noted the establishment of the Air Space Sandbox in Perlis and the MyAERO Training Centre in Selangor’s 600-acre Aero Park. Meanwhile, in the automotive sector, a matching grant of up to RM4,000 for scrapping vehicles over 20 years old and full excise and road tax exemptions on new national cars for taxi and e-hailing operators are expected to drive green mobility uptake, particularly in support of local EVs by PROTON and PERODUA.
MITI also outlined support for the halal industry, including a new RM124 million Halal Industrial Park in Perak’s Manjung district, RM100 million in financing via SME Bank, and RM2 billion in Government guarantees through SJPP. Free halal advisory services by the Halal Development Corporation will further assist SME adoption and internationalisation, as Malaysia targets RM80 billion in halal exports by 2030.
NIMP2030: Industrial Policy Gains Traction with SME Support and Equity Participation
Under NIMP2030, MITI is mobilising RM200 million via the Strategic Co-Investment Fund (CoSIF) and RM180 million under the NIMP Industrial Development Fund (NIDF) to accelerate SME growth in high-value sectors. A further RM105 million allocated to VentureTECH will support Bumiputera equity participation in advanced technology ventures.
Green Transition and Sustainable Investment
Budget 2026 includes targeted support for MITI’s Green Investment Strategy and Circular Economy Policy Framework.
Among the highlights are a 100 per cent Green Asset Investment Tax Allowance (GITA) for companies using locally manufactured green products certified under the MyHIJAU Mark, the planned introduction of a carbon tax for certain sectors, and a near-2GW expansion in solar generation.
GLCs and GLICs are also set to drive RM16.5 billion in investments for green infrastructure, including EV charging facilities and solar farms. Between 2024 and mid-2025, RM25.4 billion in green investments across 1,708 projects have already been approved, expected to generate nearly 10,000 new jobs.
Developing Talent for Strategic and High-Tech Sectors
MITI stressed that developing a skilled and industry-ready workforce remains essential. Under NIMP2030, median wages in the manufacturing sector have risen by 23 per cent between 2021 and 2024 — from RM1,976 to RM2,490.
To meet semiconductor industry needs under the National Semiconductor Strategy, Malaysia targets the development of 60,000 qualified engineers. In Budget 2026, this is supported by three million training opportunities via HRD Corp and RM650 million allocated for TVET training to benefit over 25,000 trainees aligned with NIMP2030 targets.
MITI also welcomed Khazanah’s K-Youth programme for on-the-job training of 11,000 non-degree youth, and the role of the Johor Talent Development Council (JTDC) in bridging higher education institutions with industry for premium wage placements.
Over 13,000 high-skilled Malaysian workers have already been trained in the semiconductor sector through public-private initiatives such as CREST and TalentCorp.
“Budget 2026 reflects the vital role MITI and its agencies play in strengthening Malaysia’s economic competitiveness and resilience amid global geo-economic and geopolitical uncertainty,” said Zafrul.
“We remain committed to implementation and delivery, including quarterly progress reporting via the MITI Scorecard.
These initiatives will be executed with urgency to improve the people’s livelihoods and open more opportunities for SMEs, while keeping Malaysia on track to becoming one of the world’s top 12 most competitive economies by 2033.” -- October11, 2025