New Delhi’s move to list palm oil as a restricted item is likely to hit Malaysia, India’s main supplier of the commodity
India is the world’s biggest edible oil importer and Malaysia is India’s main supplier of refined palm oil
NEW DELHI :
As India’s economic clout grows, New Delhi is creating its own version of sanctions for countries seen as unsympathetic to its concerns and core interests.
A case in point is Malaysia. New Delhi announced last week that it was moving palm oil from a list of freely imported items to a restricted category. This means traders would need special permits to import the product. India is the world’s biggest edible oil importer and Malaysia is India’s main supplier of refined palm oil. The product is Malaysia’s biggest agricultural export, accounting for 2.8% of its gross domestic product and 4.5% of total exports, according to a Reuters report from Kuala Lumpur.
The move comes in the wake of tensions between India and Malaysia after several statements by Malaysian Prime Minister Mahathir bin Mohamad were viewed as being against India’s interests. In October, Mahathir had said India “invaded and occupied" Kashmir.
In December, the Malaysian prime minister had said he was “sorry to see that India, which claims to be a secular state, is now taking action to deprive some Muslims of their citizenship. If we do that here, you know what will happen. There will be chaos, there will be instability and everyone will suffer".
New Delhi, on its part, said the new Citizenship (Amendment) Act is aimed at fast tracking citizenship of minorities, including Hindus, Christians, Sikhs, Parsis, Jains, and Buddhists fleeing religious persecution in Afghanistan, Bangladesh and Pakistan.
Foreign ministry spokesman Raveesh Kumar, however, said last week that India has not imposed any ban on Malaysian palm oil imports but its move was defined by India’s trade policy. “There are basically three categories under which you can import items, open, restricted and prohibited. This (palm oil and palmolein) is not under prohibited category. Why do you presume that this means imports will be stopped?" he had asked.
India’s move cannot be strictly deemed as “sanctions", given the neutral wording of the government notification, said former foreign secretary Kanwal Sibal. However, the “subtext of the move shows the aim is to limit imports from Malaysia and shift imports to Indonesia". This is India’s way of expressing displeasure against Mahathir’s actions, he said.
The notification’s wording allows a review of the move as required, he said. “This is because Mahathir’s comments are seen as excessive, hitting at core national interests. It is a good step," Sibal said.