Nepal and Indonesia said they were studying India’s decision to restrict import of palm oil products, which understandably is aimed at Malaysia that recently has criticised India’s actions in Kashmir and the Citizenship (Amendment) Act 2019. The diplomatic comments poured in as the Commerce Ministry sources said the restriction of palm oil is not meant for a single country but aimed at the product itself.
“The status of relationship between any two countries is something that they would look before they get into trading. Of course that [political relationship] happens to be a factor,” said official spokesperson of the Ministry of External Affairs Raveesh Kumar indicating that the products were placed in the “restricted category” by the Ministry of Commerce and Industry because of the recent tension between India and Malaysia. Malaysian Prime Minister Mahathir Mohammed in recent weeks has repeatedly criticised Indian decisions regarding Kashmir, the CAA and the NRC.
India imports approximately 30% of palm oil, part of the vegetable oil requirement, from Malaysia. Nepal too in recent years has emerged as a major regional refiner and supplier in South Asia.
Adding to the unfolding official policy, a source in the Ministry of Commerce and Industry said, “Restrictions can’t be targeted on a single country. It’s a restriction on a product that is being imposed.” This approach of restricting the product itself drew diplomatic reactions from Nepali and Indonesian sources who pointed out that they were “studying the impact” of Wednesday’s notification that restricts palm oil and palmolein imports.
Mr. Kumar also emphasised that the restriction was “product specific” and not “country specific” but the officials were yet to provide the explanation of why a measure meant for Malaysia appeared to affect imports from Nepal and also Indonesia and how the concerns could be addressed. In response, a Nepali official source said they expect India would ensure exemption for their export of palm oil products to India.
“Under the bilateral agreement with India, we enjoy the privilege of exporting goods that receive value addition in Nepali territory and we hope this will be looked into by India while deciding on the status of palm oil,” said the source.
Mr. Kumar pointed out that India-Malaysia ties were “very good” in the past and hinted at the larger diplomatic context of restricting palm oil imports saying, “We have told them that they should keep in mind the sensitivities that we have. Unfortunately, we keep on getting similar sentiments coming out from them and we do hope that at some stage they will realise that this is not the appropriate thing to do.”