Upset India weighs diplomatic options against Malaysia
New Delhi has sufficient clout to put a diplomatic cost on Kuala Lumpur owing to Malaysian President Mahathir's defiance on Kashmir earlier in UNGA. India can shift its Malaysia purchase to Indonesia as a retaliatory step to Mohamed's non-compliance.
ET has gathered that India is also not fully convinced if the Malaysian government is doing enough on the extradition of Zakir Naik. “We hear different voices, even though they say the legal process is underway,” said an official in know of the India-Malaysia conversation.
In particular, government sources told ET, specific measures are being looked at to disincentivise India’s import of palmolein from Malaysia. As the world’s largest palmolein importer, India has sourced $900 million worth of this oil from Malaysia in the first six months of this year alone. In fact, India is the second largest buyer of palmolein from Malaysia.
According to government assessment, India easily can easily shift its Malaysia purchase to Indonesia. But the only worry for New Delhi is that such a move would hurt Malaysian farmers, many of whom have changed their regular cropping pattern to cater to the Indian market. On the larger trade front too, Indian imports from Malaysia in 2018-19 were $10.81 billion, which is $4billion more than Indian exports. Clearly, India’s FTA with ASEAN and Comprehensive Economic Cooperation Agreement have worked in Malaysia’s favour.
According to government sources, New Delhi is extremely upset because it has over the years the gone the extra mile to deepen its ties with Malaysia. Former Prime Minister Manmohan Singh signed a strategic partnership with Malaysia in 2010, which PM Narendra Modi converted into an ‘Enhanced Strategic Partnership’ in 2015. In 2018, Najib Razak, the then Malaysian PM, was among the ASEAN heads of state and government who were chief guests at the Republic Day parade. To ensure continuity, Modi also took a detour to drop by in Malaysia on May 31 last year just to felicitate newly elected PM Mahathir Mohamad.
Even on the defence front, Indian Air Force trained Malaysian pilots on the Sukhoi SU-30 fighters in 2008-10. Both countries have institutionalised a defence secretary-level dialogue.
With more than 150 Indian companies, including 61 joint ventures, operating in Malaysia, New Delhi has sufficient clout to put a diplomatic cost on Kuala Lumpur. However, sources added, the concern in India is whether entire relationship should be made to suffer just because of 94-yearold Mahathir’s defiance on Kashmir.