KUALA LUMPUR: Malaysia does not want to escalate a palm oil spat with India by talking of any retaliation for now, two government sources said on Thursday, after the prime minister’s media adviser called for tighter regulations on Indian expatriates and products.

Malaysia is instead betting on diplomacy to quell India’s anger at Prime Minister Mahathir Mohamad speaking out against two recent Indian domestic policies, which critics say discriminate against Muslims in the country.

India, the world’s biggest buyer of edible oils, last week set restrictions on imports of refined palm oil and informally asked traders to stop importing all kinds of palm oil from Malaysia.

Sources said the moves were in retaliation for Mahathir’s criticism of India stripping the autonomy of occupied Kashmir and a new citizenship law.

The moves are expected to hurt Malaysia badly as it is the world’s second biggest producer and exporter of palm oil after Indonesia, and India has been its biggest market for five years.

India’s Commerce Minister Piyush Goyal on Thursday said New Delhi had not imposed any curbs on imports from Malaysia, and that the government was not contemplating any restrictions.

However, he added without elaborating that if India did impose curbs, they would apply to all countries uniformly.

One of the sources — both declined to be named as they were not authorised to talk to the media — said that Malaysia’s palm oil minister briefly told cabinet on Wednesday that her efforts to resolve the issue would revolve around engagements with Indian industry and government officials.

Published in Dawn, January 17th, 2020