According to the report, New Delhi was looking to cut or limit palm oil imports and other goods from Malaysia (Bloomberg file)
According to the report, New Delhi was looking to cut or limit palm oil imports and other goods from Malaysia (Bloomberg file)

Tensions rise as Kuala Lumpur, Delhi weigh tit-for-tat tariffs

  • India had in August abrogated Article 370 of its Constitution and integrated Kashmir more closely with the rest of the country — a move Pakistan slammed
  • Islamabad has been reaching out to countries like Malaysia, Turkey and China for support on its stand on Kashmir

New Delhi: Tensions seem to be brewing between India and Malaysia, with both the countries reportedly eyeing reciprocal trade curbs following prime minister Mahathir Mohammed’s support for Pakistan over India scrapping a temporary article in its constitution granting special status to Kashmir, according to news reports.

Mahathir has said his government will monitor bilateral trade with India following reports that New Delhi was considering punitive trade measures on the Southeast Asian nation over his criticism of India’s actions in Kashmir, Reuters news agency reported on Monday.

According to the report, New Delhi was looking to cut or limit palm oil imports and other goods from Malaysia in retaliation to Mahathir's speech at the United Nations in September when he said India "invaded and occupied" Jammu and Kashmir.

There was no immediate comment from the Ministry of External Affairs to the reports on trade curbs by India on Malaysia.

India had in August abrogated Article 370 of its Constitution and integrated Kashmir more closely with the rest of the country — a move Pakistan slammed.

Islamabad has been reaching out to countries like Malaysia, Turkey and China for support on its stand on Kashmir, saying the territory is disputed and India is in illegal occupation of a section of the region. New Delhi, on its part, has maintained that Jammu and Kashmir is Indian territory following the accession of the state to the Indian government at the end of British rule in 1947.

Mahathir has traditionally been seen as supportive of Pakistan, with ties with India improving only after he retired in 2003. The nonagenarian Mahathir staged a surprise comeback in elections held in Malaysia last year.

Mahathir has said his government will "study the impact of the action taken by India", the state-owned news agency Bernama said, according to Reuters. "They are exporting goods to Malaysia too. It's not just one-way trade, it's two-way trade," Mahathir was quoted as saying in the report.

India is the world's largest importer of edible oils, and is the biggest buyer of Malaysian palm oil. It bought 3.9 million tonnes of Malaysian palm oil in the first nine months of 2019, according to data compiled by the Malaysian Palm Oil Board.

Malaysia's key imports from India include petroleum products, live animals and meats, metals, chemicals and chemical products.

It is unclear what impact India’s possible trade curbs on Malaysia will have on negotiations for the Regional Comprehensive Economic Partnership which is a mega trade agreement comprising 10 Southeast Asian Nations of which Malaysia is a part and six other countries including India, Japan, China, South Korea, Australia and New Zealand. The 16 countries are expected to come to an understanding by next month when ASEAN and its partners meet in Bangkok.

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