“Let me state categorically that the Home Ministry never came out with any ruling that we have stopped the intake of foreign workers from India,” Home Minister Radzi Sheikh Ahmad told reporters.

He said he was not aware where these reports came from. “This has disturbed us a lot,” he said.

Malaysia Home Ministry officials told foreign news agency reporters on Tuesday that Malaysia has stopped recruiting Indian workers, citing a Cabinet order of December 18. The officials read out the Cabinet order to reporters on the phone and said the ban was apparently linked to recent unrest among Malaysia’s minority ethnic Indians, who are demanding racial equality in the Muslim-majority country.

The report about the ban triggered a furore in India. However, Malaysian Works Minister Samy Vellu, who is in New Delhi to attend the conference of overseas Indians, denied the reports on Tuesday itself.

Vellu, also the President of the Malaysian Indian Congress (MIC) — a component of the ruling Barisan National coalition — said that he had contacted Prime Minister Abdullah Ahmad Badawi and Home Ministry Secretary-General to get a clearer picture on the issue. “It is not true. There is no such thing,” Vellu told reporters when asked about the reports of freeze on employment of Indian workers.

Radzi, whose ministry is in charge of issuing visas to foreign workers, repeated Vellu’s denial on Wednesday and said the reports have not hurt Malaysia’s ties with India. He, however, felt that the confusion could have been caused following a ruling that the country was going to temporarily ban workers from Bangladesh, following problems sparked by labour agents who leave the migrants stranded on arrival, he said.

With the Government seeking to cut reliance on foreign labour and more local employers hiring Indonesian workers, rather than Indian labourers, it also created an impression that Indians were being banned, Radzi added.

Malaysia now has 2.1 million documented foreign workers, breaching the Government’s limit of 1.8 million, he said.

“We are trying to reduce the number of foreign workers in Malaysia ... but at the same time, we have to make sure our industries do not suffer. We have to make a balance,” Radzi said, stressing there was no move to place a limit on workers from India.

About 140,000 Indian migrants work in Malaysia, comprising the third-largest group of foreign workers. Most take low-paying jobs as waiters, barbers and gardeners. Some, however, hold top professional posts in banks and information technology industries.