India restricts refined palm oil imports from Malaysia over Kashmir, CAA

The government has imposed restrictions on imports of refined palm oil and palmolein, a move in retaliation against top supplier Malaysia after its criticism of India’s actions in Kashmir and the Citizenship (Amendment) Act, 2019 (CAA).

According to a notification of the Directorate General of Foreign Trade (DGFT), “import policy” is amended from “free to restricted” for refined bleached deodorised palm oil and refined bleached deodorised palmolein, a PTI report said.

On 20 December last year, Malaysian Prime Minister Mahathir bin Mohamad had reportedly said, “I am sorry to see that India, which claims to be a secular state, is now taking action to deprive some Muslims of their citizenship…If we do that here, you know what will happen. There will be chaos, there will be instability and everyone will suffer.”

Earlier, Mahathir had said in the UN General Assembly that India had “invaded and occupied” Kashmir, PTI said.

Putting the commodity in a restricted category means an importer will require licence or permission for the inbound shipment.

India, the world’s largest importer of vegetable oils, buys nearly 15 million tonnes annually. Of this, palm oil comprises 9 million tonnes and the rest 6 million tonnes of soybean and sunflower oil.

Indonesia and Malaysia are the two countries that supply palm oil.

Malaysia produces 19 million tonnes of palm oil in a year, while Indonesia produces 43 million tonnes, the trade data showed.

A Reuters report said that the memo was an effective ban on imports of refined palm oil, meaning India can now only import crude palm oil. It will hit Malaysia, the main supplier to India of refined palm oil and palmolein, but is likely to help Indonesia, the biggest exporter of crude palm oil. Palm oil accounts for nearly two-thirds of India’s total edible oil imports. The country buys more than 9 million tonnes of palm oil annually, mainly from Indonesia and Malaysia. Indonesia is the world’s biggest producer of palm oil, followed by Malaysia.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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