India, the world’s top palm oil buyer, is shunning purchases from Malaysia after the Southeast Asian nation’s prime minister criticized its policy in Kashmir, sparking the latest trade spat in the region, says Bloomberg.
Malaysian Prime Minister Mahathir Mohamad last month told the United Nations that India “invaded and occupied” Kashmir. Since then, the wire agency said many Indian buyers of palm oil have started shifting to Indonesian supplies amid concern that Prime Minister Narendra Modi will curb purchases of the vegetable oil from Malaysia.
“India will replace Malaysian palm oil imports by buying more from Indonesia and increasing edible oil supplies from Ukraine,” it cited Bipul Chatterjee, who heads the CUTS Centre for International Trade, Economics and Environment in Jaipur, India. “It’s the first time ever that India has used its heft as a trade partner to express unhappiness about a political statement.”
“China and the U.S. often use trade ties as a means of power,” Chatterjee said. “It seems India has also entered the game where trade is not just trade, it is also a weapon.”
Any action by India to stop palm oil purchases from Malaysia will hit at the heart of the Southeast Asian country’s industry. Palm is Malaysia’s biggest agricultural export, while India is its top buyer, buying some US$@ billion worth of palm oil between January and September.
Mahathir’s comments on Kashmir have sparked anger among India’s citizens too, with the #BoycottMalaysia hashtag trending on Twitter, and netizens calling on people not to travel to Malaysia and avoid trade with the nation.
“This is a reaction from traders so we cannot react to their personal decision,” the report quoted Mahathir as telling reporters in Kuala Lumpur on Wednesday, referring to Indian buyers avoiding Malaysian palm oil. “If the government launched a boycott or something like that, then we will have to work diplomatically perhaps to reduce the kind of action that they have taken.”
Minister of External Affairs spokesperson Raveesh Kumar said that India had had traditionally good ties with Malaysia, which had strengthened in recent years.
Hence, he said that India was ‘surprised’ and ‘deeply regret’ the comments made by the Malaysian prime minister, adding that it was not ‘based on facts’.