SMC released an English-Malayalam Dictionary for dict servers. I have made a package so any Arch – Malayalam (!!!) users out there can use it. You can get the PKGBUILD from AUR. If you have yaourt installed, you just have to run
yaourt -S dict-freedict-eng-mal
in a terminal.
I have also built a package that is available here. You can download and install it using
pacman -U dict-freedict-eng-mal-0.1-2-i686.pkg.tar.gz