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India, Malaysia: Kuala Lumpur Aims for Diplomatic Solution If New Delhi Curbs Palm Oil Imports

1 MIN READOct 17, 2019 | 15:08 GMT

What Happened: Malaysia plans to find a diplomatic solution with India if New Delhi decides to impose import tariffs on Malaysian palm oil, Reuters reported Oct. 16. India is reportedly considering the duties after Malaysian Prime Minister Mahathir Mohamad criticized India's decision to revoke the autonomy of Jammu and Kashmir during a speech at the U.N. General Assembly in September.

Why It Matters: India is Malaysia's largest destination for palm oil exports, with shipments totaling 3.9 billion tons since the beginning of the year. Meanwhile, Malaysia is considering increasing its buffalo meat and sugar imports from India to ease trade tensions. If New Delhi moves ahead with the tariffs, it could potentially disrupt negotiations between both countries for the conclusion of the Regional Comprehensive Economic Partnership.

Background: During his speech at the U.N. General Assembly, Mahathir said India had "invaded and occupied" Kashmir. Earlier this week, reports suggested that several Indian refiners have not placed orders for Malaysian palm oil deliveries for November and December over uncertainty whether New Delhi might raise tariffs.

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