Palm oil import curbs: Why Malaysia doesn’t want to ‘retaliate’ against India | India News
too small to retaliate against India
+ , after curbs on import of palm oil were introduced by New Delhi, ostensibly targeting Kuala Lumpur for
+ on domestic issues such as CAA and Kashmir.
India is also reportedly unhappy with Malaysia’s refusal to revoke permanent resident status for controversial Indian Islamic preacher Zakir Naik, who has lived in Malaysia for three years and faces charges of money laundering and hate speech in India.
“We are too small to take retaliatory action. We have to find ways and means to overcome that,” the Malaysian PM told reporters.
India, the world’s largest edible oil buyer, has so far only targeted
palm oil imports
+ , officially to safeguard its domestic industry though the hardest hit will be Malaysia, since India is its biggest buyer — accounting for nearly a quarter of Malaysia’s palm oil exports. However, palm oil constituted just 13.38% of total imports from Malaysia in 2018-19 — and it wasn’t even the largest imported item. That honour belonged to mineral fuels and mineral oils — which explains why Mohamad doesn’t want to rock the boat more than he already has.
Not a surprise
India has been Malaysia’s largest palm oil market for the five years. How imports of Malyasian palm oil have been on the decline — even as New Delhi’s imports of palm oil from other countries such as Indonesia, which is not only the world’s biggest palm oil producer but also has lower production costs, have accelerated over the last one year, doubling from a little over 3 lakh tonnes in January 2019 to more than 6 lakh tonnes in December 2019. Between 2014-15 and 2018-19, Malaysian palm oil imports have declined by almost 42.5% in value.
Tensions between the two countries had been brewing since some time and India had fired a warning shot last year when it jacked up tariffs on imported palm oil by 5% in September 2019. The balance of trade between New Delhi and Kuala Lumpur lies with the latter — with exports to India exceeding imports from India by more than $4 billion. Moreover, while India is the seventh biggest export market for Malaysia, it, in return, is India’s 17th biggest export market — making it way down the pecking order of economic importance.