India has now resumed its Palm Oil trade with Malaysia and traders are opting for their long term supplying nation over Indonesia. The exports will be resumed after a gap of literally one month.  This comes after Kuala Lumpur has been offering a $5 per tonne discount over its rival supplier Indonesia.

Mixing politics with trade, India seemed to follow in US footsteps as it discouraged traders from purchasing Malaysian palm oil, hitting the Malaysian economy adversely.

Indian refiners stopped purchases from Malaysia last month fearing New Delhi could raise import taxes or enforce other measures to curb imports after Kuala Lumpur criticized New Delhi for its actions in Kashmir.

Malaysian PM Mr. Mohamad had made possible a derogatory statement over the way India was handling the Kashmir issue, a move that did not go well with Indian PM Narendra Modi in the end of October. The result was that a political skirmish has become an economic battle between Indian and Malaysia, over their largest trade commodity Palm oil.

 Mahathir referred to India’s move towards Kashmir as “invasion and illegal occupation” which according to him is a Muslim majority region also claimed by Pakistan. It is worth noting that Malaysia has recently signed a trilateral agreement with Turkey and Pakistan to start a television channel to break the myths around Islamophobia. Malaysia had later increased it’s raw sugar and buffalo meat imports from India, in the hope of easing off tension.

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