Post the unwavering support to Pakistan on the FATF and rants over Kashmir and the Citizenship Act, New Delhi had curbed the import of palm oil from Malaysia plummeting the bilateral relations. With the resignation of Mahathir Mohammad, India and Malaysia are geared-up to reset ties. Is that bad news for Pakistan?

Palm oil accounts for nearly two-thirds of India’s total edible oil imports. India buys more than nine million tonnes of palm oil annually, mainly from Indonesia and Malaysia. New Delhi dropped its import remarkably from Malaysia in recent months after attacks on its’s policies by the Prime Minister, Mahathir Mohamad.

During his address to the United Nations General Assembly last year, the 94-year-old leader had said that the Narendra Modi government had “invaded and occupied” Kashmir by abolishing Article 370 and Article 35A, a statement that infuriated New Delhi.

Mahathir had severely criticized India for its new citizenship amendment law, which was projected as a discriminatory law against the minority community, Muslims and has paved way for deadly protests and riots across the country.

Speaking from the Kuala Lumpur Summit 2019, former Malaysian PM had questioned the “necessity” of the Citizenship Act and the intent of the Indian government led by Prime Minister Narendra Modi.

In his recent visit to Pakistan, PM Imran Khan reportedly raised the issue of Kashmir dispute and both the leaders i.e. Mahathir and Imran, in a joint statement, criticized the unilateral actions of the Indian government to ensure complete communication lockdown in the region. They also talked about the immense suffering of Kashmiri people.

The Financial Action Task Force (FATF), was likely to place Pakistan in the blacklist, has now extended its decision to retain Pakistan in the grey-list after “friends” Turkey and Malaysia openly expressed their support to Pakistan.

Irked by hostile actions and interferences by the Malaysian government in India’s internal matter, New Delhi, who had been a top palm oil buyer from Malaysia imposed restrictions on its imports, a move seen as a direct retaliation against Malaysian Government.

The latest report of Malaysia’s export data reveals the significant impact of India’s restrictions. The shipments to India fell 85% to that of a year earlier, the lowest since 2011. India accounted for a quarter of Malaysia’s total palm oil exports last year and has been the biggest importer of Malaysian palm oil for five years.

The refined palm oil export was slapped a 5% safeguard duty by India, which is currently valid until March 2020. It has been decided by top officials of the country that refined palm oil would be placed under a restricted category requiring importers to acquire a licence from the directorate general of foreign trade. A note from the cabinet secretariat ensured stringent scrutiny of all licences to prevent “harm on domestic industry”.

Malaysia swore in a new Prime Minister, Muhyiddin Yassin, after the resignation of the pro-Pakistan leader Mahathir Mohamad post the power battle in the coalition government. A lawmaker, Wee Ka Siong, is expected to gain an important ministerial post who is said to have expressed a keen intent to repair the bilateral ties with India as the stringent ban on palm oil has adversely dented the Malaysian economy.

Backing up the speculation, an Indian official hinted at India’s intention to end the 5% safeguard duty after the exit of the pro-Pakistan leader. According to sources from New Delhi, India could also invite Muhyiddin Yassin, the new Malaysian Prime Minister that would mean that both the countries are set to bury the past and reset the ties.

The move, however, has one condition – if Malaysia stays out of India’s internal affairs and as experts suggested – stop backing Pakistan at the FATF and over Kashmir.