NEW DELHI: After refined palm oil, the government is looking to further step up the heat on Malaysia with a plan to restrict the import of microprocessors amid indications that the trade dispute is unlikely to be sorted out soon as the Southeast Asian nation continues to rile India over Kashmir and the Citizenship (Amendment Act).

Malaysian PM Mahathir Mohamad’s determination to speak out on what India believes are its internal issues has seen the Modi government working on imposing technical standards on microprocessors and also putting in place a quality control order for telecom equipment, sources told TOI.

Customs authorities have been asked to ensure compliance of the quality control order as part of efforts to restrict the entry of Malaysian equipment into India, in what is probably the first trade retaliation by India against a country’s political stance.

On Tuesday, Mohamad said he was worried over the trade restrictions but added that he would continue to speak out against “wrong things”.
“We are concerned, of course, because we sell a lot of palm oil to India, but, on the other hand, we need to be frank and see that if something goes wrong, we will have to say it,” the veteran leader told reporters in Kuala Lumpur.

“If we allow things to go wrong and think only about the money involved, then I think a lot of wrong things will be done, by us and by other people,” he added.

A news agency said the 94-year-old leader vowed to find a solution as prices crashed in the futures market after India, the world’s largest buyer of edible oil, decided to move refined palm oil from the list of free imports to the restricted category.

Apart from Mohamad’s comments on Kashmir and CAA, Indian authorities are upset with Malaysia’s reluctance to extradite controversial preacher Zakir Naik, prompting the government to hit back on the trade front. On January 9, TOI had reported that India intended to step up action against Malaysia with restrictions on palm oil and electronics imports.

Separately, the mines ministry is keeping tabs on imports and may initiate action in the coming weeks, officials said. Malaysian palm oil already faces 50% import tariff, due to a 5% safeguard duty, compared to 45% on Indonesian oil. The duty is up for review next month, sources said.

India’s trade with Malaysia was estimated at over $17 billion, with exports pegged at $6.4 billion, while imports were estimated at $10.8 billion.