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Malaysia should mind its own business

Malaysia should mind its own business
Highlights

This is a complex world and no country should shun reason, whatever may be its compulsions, while looking at others.

This is a complex world and no country should shun reason, whatever may be its compulsions, while looking at others. India's move to restrict palm oil imports from Malaysia is a result of the latter's own making.

This will create a huge challenge for the world's second biggest producer of the edible oil as India has been its top market for the past five years. India, the world's largest buyer of edible oils, last week restricted imports of refined palm oil and effectively halted all palm oil purchases from Malaysia in retaliation for criticism by the Malaysian Prime Minister of India's policy towards Kashmir.

While Malaysia and India have long had a bilateral relationship, ties have been elevated over the past decade, first to a strategic partnership in 2010 under former Indian Prime Minister Manmohan Singh and then to an enhanced strategic partnership under Narendra Modi in 2015.

This is despite occasional differences over issues such as trade or the treatment of minorities in both the countries, with having a sizable Muslim minority and Muslim-majority Malaysia having a small Indian population.

The Indian government withdrew the autonomy of Kashmir on August 5, shutting down internet access and detaining activists and politicians. Malaysian Prime Minister Mahathir Mohamad said in his remarks to the United Nations in September that Hindu-majority India was "invading and occupying the country" of Jammu and Kashmir.

This crossed multiple red lines in India. Despite initial indications of Indian discontent – including a statement from the Foreign Ministry and suggestions of economic restrictions – and comments from Malaysian officials that both sides were managing the issue, 94-year old Mohamad himself had refused to retract his comments.

Further, he again crossed his limits by commenting on CAA. India has therefore flexed its buying muscles to impose what amounts to an effective ban on imports of refined Malaysian palm oil. India's Ministry of Commerce and Industry has issued a notification noting that the import of refined palm oil had been amended from "free" to "restricted."

India is the seventh biggest market for all Malaysian exports, while Malaysia is India's 17th largest export market. Malaysia is the world's second largest producer and exporter of palm oil after Indonesia, with the product accounting for about 3 percent of Malaysia's entire GDP.

India was Malaysia's biggest buyer of palm oil in 2019, buying 4.4 million tons. In 2020, purchases could fall below 1 million tons if relations do not improve. An effective ban on refined palm oil is a big hit for Malaysia since it is the main supplier of refined palm oil to India.

Meanwhile, India will retain the ability to continue importing – and perhaps even importing more of – crude palm oil, which Indonesia is the leading exporter of.

It is also reported that New Delhi could also restrict imports of petroleum, aluminium ingots, liquefied natural gas, computer parts and microprocessors from Malaysia. Perhaps it is senility on part of Mohamad that is speaking.

The country is grappling with radicalisation in the political arena as well as in the context of terrorism, raising the spectre of violent civil unrest. There are better things to do for Mohamad.

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