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Malaysia: Mahathir to turn to diplomacy if India restricts palm oil imports

Palm oil minister says imports of Indian raw sugar and buffalo meat could increase

File photo of Malaysian Prime Minister Mahathir Mohamad | AP

Amidst reports that India is considering curbing its imports of palm oil from Malaysia in the wake of president Mahathir Mohamad’s comments on Kashmir at the United Nations General Assembly, the Malaysian president has said that in such an event, he would turn to diplomacy or “reduce the kind of action” India takes.

According to Malaysian state news agency Bernama, Mahathir made the comments while inaugurating the Yayasan Sejahtera's Community Development Fund at the International Day for the Eradication of Poverty 2019 Forum in Kuala Lumpur. “If the [Indian] government launched a boycott or something like that, then we will have to work diplomatically or reduce the kind of action that they have taken,” he said.

There has been no official statement from India on restriction, though some traders have stopped buying Malaysian palm oil fearing the imposition of import taxes. Mahathi added that “This is the reaction from the business community. Hence we cannot react to their personal decisions.”

India is Malaysia’s third-largest export market for palm oil with exports of the same and related products worth $1.62 billion.

Trade tensions between India and Malaysia rose after Mahathir's speech at the UNGA on September 30, where he said that India had “invaded and occupied” Kashmir, referring to India’s decision to abrogate Article 370 that had granted Kashmir special status. Saying that India may have still had reasons to do so, he added that it was “still wrong”.

Mahathir said that ignoring the UN could lead to “other forms of disregard for the United Nations and the rule of law.”

On Wednesday, Malaysia’s Ministry for Primary Industries offered to increase imports of buffalo meat and sugar from India in a bid to reduce trade tensions.

A statement issued by the Minister for Primary Industries (which includes palm oil), Teresa Kok, said, “The minister views with concern recent news reports regarding unfavourable bilateral relations between Malaysia and India as both countries have enjoyed strong and comprehensive relations for more than six decades,” adding that "Malaysia is open to further trade negotiations to address India’s concerns on the trade imbalance between both countries.”

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