Kashmir tensions fail to stymie trade as Kuala Lumpur looks to upgrade air force. India's light combat aircraft Tejas lands at an airbase on the outskirts of New Delhi in October. The fighter is claimed to be a good choice to upgrade Malaysia's air force

NEW DELHI -- Malaysia has expressed interest in purchasing India's Tejas multi-role combat aircraft, despite strained ties with New Delhi over Kashmir.

State-run Hindustan Aeronautics, manufacturer of the single-engine jet touted as the world's lightest supersonic fighter, appears keen to submit a bid early next year to supply up to 36 of the aircraft to the Royal Malaysian Air Force, according to defence-related sources who spoke on condition of anonymity.

The development comes despite recent tensions between India and Malaysia following Kuala Lumpur's support of Pakistan over Kashmir, a Muslim-majority region whose special status was scrapped in August by the Indian government of Prime Minister Narendra Modi.

Malaysian Prime Minister Mahathir Mohamad, in his speech at the U.N. General Assembly in September, said India had "invaded and occupied" Kashmir, a disputed region that both New Delhi and Islamabad claim. The Indian government slammed his remarks as "unacceptable."

Fearing government action against Kuala Lumpur, Indian importers had decided over a month ago not to procure palm oil from Malaysia. Analysts point out, however, that even though diplomatic ties have suffered, the Indian government has not stopped trade with Malaysia.

B V Mehta, executive director of the Solvent Extractors' Association of India, told the Nikkei Asian Review this week that some traders had resumed importing from the Southeast Asian country, which supplies 3 million tons of palm oil annually to India.

The association had previously advised traders last month to be cautious in dealing with Malaysia as it anticipated retaliatory action against the country. But Mehta said "some people have started buying [palm oil] again."

Analysts similarly feel that the frosty relations will not hinder Hindustan Aeronautics' efforts to sell their fighter. "Hindustan Aeronautics is trying to [grow] and... also working on developing an international division," said Pankaj Jha, former deputy director of India's National Security Council Secretariat.

He said the bilateral tensions are "momentary" and will definitely ease in the future. "Moreover, Mahathir won't be at the helm for more than two or three years, after which India-Malaysia relations will be back on track."

Still, one of the sources said "the Hindustan Aeronautics cannot proceed to bid for the Malaysian contract until it gets a nod from the Indian government," though the source also feels that relations will improve in the near future.

Tejas, which means radiance in Sanskrit, was on display at the Langkawi International Maritime and Aerospace Exhibition in Malaysia last March. Mahathir and Defence Minister Mohamad Sabu inspected the aircraft and met with members of the Indian Air Force.

According to Malaysia's state-run Bernama news agency, Royal Malaysian Air Force chief Gen. Affendi Buang said that 40% of his fleet -- which includes British, American and Russian fighters -- needs to be upgraded immediately.

Hindustan Aeronautics Chairman and Managing Director R. Madhavan said on the sidelines of the March exhibition that Tejas would be a good replacement for Malaysia's fighter jets.

Tejas is equipped with advanced systems for avionics, weapons, navigation and radar, and is capable of carrying armaments from different countries.

Apart from Tejas, Malaysia is considering the JF-17 fighter, co-developed by China and Pakistan, and South Korea's FA-50.

Defence analyst Jha points out that India has been using Russian aircraft for decades, and drew inspiration from those jets when developing Tejas. "Malaysia has also been using Russian aircraft, making Tejas [a good fit]."