mahathir mohamad kashmir

India’s Restrictions on Palm Oil to Keep Out Malaysia Have Halted Nepalese Exports as Well

Nepalese commerce secretary Baikuntha Aryal says palm oil comprised 30% of the country’s exports.

Kathmandu: The Nepal government says that all exports of palm oil to India have stopped since the Indian Directorate General of Foreign Trade (DGFT) issued a notification earlier this month, imposing restrictions on imports of refined palm oil with the aim to shut out Malaysia.

On January 8, DGFT issued a notification that foreign trade policy has been amended to bring three categories under refined palm oil from “free” to “restricted”. An importer has to obtain licence on a case-to-case basis once a commodity is listed under the “restricted” category.

In the last two years, refined palm oil had shot up to the top of Nepal’s export list. Several factories have been set up to repackage oil to get greater access to the Indian market on the face of the South Asia Free Trade Agreement (SAFTA).

Giving details of the importance of palm oil to Nepal, Nepalese commerce secretary Baikuntha Aryal said that in the first five months of the fiscal year, refined palm oil contributed to “30% of total exports”.

Also read: ‘Impartial and Neutral’ Nepal Ready to ‘Play Role of Mediator’ Between India and Pak

Nepal’s fiscal year begins from mid-July.

“If you convert this to Nepalese currency, this means that palm oil exports were worth for over 11.5 billion Nepali rupees (over $100 million),” Aryal told a visiting group of Indian journalists in his office on Friday.

India has publicly claimed that the DGFT notification is “not country-specific”. However, the MEA spokesperson had then said that Indian businesses always factor in the state of bilateral relationship when importing products.

With India maintaining that relations with Malaysia are in doldrums, the spokesperson’s comments provided a strong signal about the objective of the DGFT notification. India has been deeply unhappy over Malaysian prime minister Mahathir Mohammed’s critical words on India’s actions in Kashmir and the passage of the Citizenship Amendment Act.

Malaysian Prime Minister Mahathir Mohamad. Photo: Reuters

The Nepalese commerce secretary said that since any impact on palm oil exports would affect Nepal’s total export volume, there has been constant talks with New Delhi to obtain some clarity.

“For this purpose, we had started dialogue with the Indian counterpart that if there was any concern regarding our refined palmolein oil, we would be okay to sort those things out,” said Aryal.

He stated that since the change of rules by India, all exports of palm oil from Nepal has been halted. “Once the notification was issued, then everything stopped”.

Aryal noted that Nepal had not been informed beforehand or consulted before the notification.

“We only came to know in the evening. We initiated some informal contacts, talked to the Indian embassy…and I also spoke to my counterpart”.

However, he revealed that so far there has been no clarification from India on the way forward in the import licence application process.

“We don’t have any correspondence in this issue…we should know how importers should get the licence from the competent authority over there. If we know that, we can ask our exporters to comply and fulfil all the procedures.”

Aryal added that Nepal palm oil exports had “enough value addition in line with SAFTA” and that “our refineries are quality and efficient”.

Earlier, president of Nepal Vegetable Ghee and Oil Manufacturers Association, Sandeep Agrawal had told The Wire that contracts for supply of 25,000 and 30,000 tonnes of palm oil were pending when the notification was issued.

Malaysia to Buy More Indian Sugar to Resolve Palm Oil Spat

Around 50,000 tonnes of raw sugar has already been contracted by Malaysia for January shipments, said a Mumbai-based dealer with a global trading firm.

Kuala Lumpur: Malaysia’s top sugar refiner said it will increase purchases of the commodity from India, which according to two sources is part of efforts to placate New Delhi amid an ongoing spat over palm oil imports.

MSM Malaysia Holdings Berhad will buy 130,000 tonnes of raw sugar from India worth 200 million ringgit ($49.20 million) in the first quarter, the company told Reuters. It bought around 88,000 tonnes of raw sugar from India in 2019.

MSM is the sugar refining arm of the world’s largest palm oil producer, Felda Global Ventures Holdings, which is a unit of Malaysian state-owned Federal Land Development Authority or Felda.

The company did not cite the palm oil dispute as a reason for the increase in purchases. But the two sources, who are familiar with discussions between the company and the government on the purchase, said it was a bid to appease India, which has been urging Malaysia to reduce the trade deficit between the countries.

India, the world’s largest edible oil buyer, this month effectively halted Malaysian palm oil imports apparently in retaliation to Malaysian Prime Minister Mahathir Mohamad’s comments criticising New Delhi over its policy on Kashmir.

Malaysia has said it will look to other markets to sell more palm oil but that may not be easy as India has been the biggest buyer of Malaysian palm oil for the past five years, purchasing 4.4 million tonnes in 2019. The exports to India were worth $10.8 billion in the fiscal year that ended on March 31, while imports totalled $6.4 billion.

Malaysia imported a total of 1.95 million tonnes of raw sugar in 2019, according to data from the International Sugar Organization on Refinitiv Eikon. It typically buys more from Brazil and Thailand than from India.

India is the world’s biggest sugar producer but is struggling with a surplus. Its exports are expected to rise to a record 5 million tonnes for the 2019/2020 season.

MSM said it was expecting the arrival of three shipments of raw sugar from India between January and February.

“This is very good move. It will help India in increasing sugar exports,” Praful Vithalani, President of All India Sugar Trade Association told Reuters about MSM’s move to buy more from India.

Around 50,000 tonnes of raw sugar has already been contracted by Malaysia for January shipments, said a Mumbai-based dealer with a global trading firm.

(Reuters)

Palm Oil Imports: India Warns Malaysia That Bilateral Ties Are ‘Factored’ in Trade Transactions

MEA spokesperson Raveesh Kumar said the restrictions on import were “not country-specific”, before adding that the “status” of bilateral ties are a factor for Indian businessmen to buy products from a particular country.

New Delhi: A day after India imposed restrictions on imports of refined palm oil with an eye to shutting out Malaysia, the Ministry of External Affairs said on Thursday that the “status” of bilateral ties are a factor for Indian businessmen to buy products from a particular country.

The Directorate General of Foreign Trade (DGFT) had issued a notification on January 8 that foreign trade policy had been amended from “free” to “restricted” for three categories under refined palm oil.

Once a commodity is put in a restricted category, it means that an importer will have to obtain a license. These licenses are given on a case-to-case basis.

The step has been taken after relations with Malaysia have become strained over the country’s Prime Minister Mahathir Mohamad’s strong criticism of Indian policies in Kashmir and the passage of the Citizenship (Amendment) Act (CAA).

India is the largest importer of palm oil, which has been largely brought from Malaysia, Indonesia and more recently, from Nepal.

According to the commerce ministry’s export-import data bank, India had imported $425 million worth of “Refined Bleached Deodorised Palmolein” from Malaysia in 2018-19. From 2019-20 April to November, this had already doubled to $949 million.

In contrast, the numbers had dropped drastically for Indonesia. While import value had stood at $985 million in 2018-19, it decreased to just $74 million for the nine months of this financial year.

In the second category of “Refined Bleached Deodorised Palm Oil”, Malaysian imports accounted for $2.67 million, while Indonesian imports had been $5.67 million in 2018-19.

From April to November 2019-20, imports from Malaysia in this category was $1.38 million, less than half of last year’s imports. It slumped even further for Indonesia, to just around $800,000.

At the weekly briefing on Thursday, MEA spokesperson Raveesh Kumar first said the notification was “not country-specific”. But, then he added that Indian businessmen also factor the state of bilateral relationships when importing products from foreign countries.

“…so, the status of the relationship is important… If I am an importer and I have to import a certain product from a country, I would certainly keep that at the back of my mind, as to how the status of the two countries are,” he told reporters.

When asked how he would characterise the current state of ties, Kumar indicated that the relationship remained in the doldrums.

“In the past, there have been statements made by the Malaysian prime minister on which we have reacted, sometimes very strongly. We have told them that we have age-old ties. We have had a very good relationship. We have told them that they should keep in mind the sensitivities that we have on some of these topics,” said Kumar.

But, India’s strong reactions do not seem to have changed the Malaysian PM’s mind. “Unfortunately, despite our statement, we keep on getting sentiments and statements from their side. We do hope that at some stage they will realise that this is not the appropriate thing to do,” he stated.

Ministry of external affairs spokesperson Raveesh Kumar. Photo: PTI

Over the past three years, there has been a reduction in duties, which has led to import of palm oil from Malaysia to jump by 800%, said an official.

Mahathir Mohamed’s statement that India had “invaded and occupied” Jammu and Kashmir was made at the United Nations General Assembly in September 2018.

Ten days later, Reuters reported that the government was mulling restrictions on the import of palm oil from Malaysia in retaliation.

However, the government did not take those steps then. Instead, there were reports that Malaysia had offered to smoothen tensions by buying more Indian export items.

In November last year, a trade body reported that 2019-20 was seeing a surge in imports of refined palm oil from Malaysia, on the back of reduced import duty.

A Southeast Asian diplomat noted that there had been anticipation that India would take steps to limit imports of RPO, not just due to the Malaysia factor, but also due to lobbying by refineries. Another diplomatic source mused that India’s “tough tactics on a close friend like Malaysia reminds us of China’s strong-arm tactics too”.

According to a PTI report, the commerce ministry had held a meeting with edible oil industry members on Monday (January 6) to ask them to avoid purchasing Malaysian palm oil and instead look towards Indonesia.

This year, Indonesia’s palm oil export to India has fallen drastically, largely due to the 5% tariff advantage for Malaysia.

With the government having control on import licenses, the expectation is that India will be more liberal in purchasing palm oil from Indonesia and Nepal.

It is not, however, clear if Indonesia will be able to pick up the slack, with diplomatic sources indicating, that “some adjustments would be necessary”.

Meanwhile, the other country which is facing uncertainty after India placed refined palm oil in the “restricted” category is Nepal.

Palm oil has become one of Nepal’s top export items in the past two years, with business groups setting up re-packaging facilities to take advantage of lower tariff access to the Indian market under the South Asia Free Trade Agreement (SAFTA).

Speaking to The Wire, president of Nepal Vegetable Ghee and Oil Manufacturers Association, Sandeep Agrawal said that following the DGFT notification, all exports to India have stopped completely. “Our counterparts in India are trying to find out what the new system means. Till then, everything is stopped,” he said.

Agrawal said that contracts for the supply of 25,000 to 30,000 tonnes of palm oil were pending, when the notification was issued on January 8. “We are hoping that there will be some clarity soon,” he said.

Despite Bilateral Tensions, Malaysia Sent Most Foreign Tourists to Kashmir in 2019

The country’s prime minister accused India of ‘invading and occupying’ Kashmir after the Centre’s August 5 moves.

Srinagar: Even though the relationship between New Delhi and Kuala Lumpur soured following the Malaysian prime minister’s remark on Kashmir after the dilution of Article 370 in August last year, travellers from the country outnumber those from other countries among those visiting the Valley in 2019.

China, which is also at loggerheads with India over Kashmir, features among the top ten countries from where visitors arrived in Kashmir during the past year. In total 26,662 foreign tourists from 106 countries visited Kashmir in 2019.

According to the Criminal Investigation Department’s (CID) data, at least 9,822 Malaysian tourists visited Kashmir until November 2019. This number is more than double that of travellers from the country second on the list, Thailand.

Almost one-third (3,145) of the travellers from Malaysia visited the Valley in April alone.

In August, when the historic decision to revoke Jammu and Kashmir’s special status by diluting Article 370 was announced in parliament, the arrival of tourist dipped. Only 126 Malaysian tourists visited Kashmir that month. However, their number gradually grew to 460 in November.

Though arrivals of foreign and domestic tourists declined drastically after the August 5 decision, around 883 Malaysians travellers still visited the Valley in August, September, October and November.

Data showing the number of tourists arriving in Kashmir.

India’s ties with Malaysia have been strained after the latter’s prime minister statement’s on Kashmir. In October last year, Mahathir Mohamad, in his address to the 74th United Nations General Assembly (UNGA), accused India of “invading and occupying” Kashmir.

“Now, despite the UN resolution on Jammu and Kashmir, it has been invaded and occupied,” he said.

“There may be reasons for this action but it is still wrong. The problem must be solved by peaceful means. India should work with Pakistan to resolve this problem. Ignoring the UN would lead to other forms of disregard for the UN and the Rule of Law,” Mahathir had said.

Also Read: RTI Reveals Union Minister Lied to Parliament about Hit to Tourism in J&K

In November last year, amid escalating tensions, the Jammu and Kashmir Tourism Department mulled a plan to drop Malaysia from its tourism promotion campaign. The department explored the possibility of substituting the country with Saudi Arabia and the UAE. If the department is serious about such a move, it would have to ensure a massive promotion drive. During 2019, Saudi Arabia and UAE combined sent just over 100 tourists to Kashmir.

Visitors from China, Pakistan and other countries

The data shows that 543 Chinese tourists also visited Kashmir in 2019, until November. According to official figures, around 75 tourists from the country came to the Valley to enjoy their holidays after the August 5 decision.

Indian and Chinese troops are often locked in a face-off in the northeastern side of the border. Moreover, China is considered an all-weather friend of Pakistan and has always toed Islamabad’s line on Kashmir. It has also attempted to block India’s efforts to get Masood Azhar listed as a global terrorist.

Apart from China, tourists from troubled states like Pakistan, Syria, Iraq and Yemen also chose Kashmir as their holiday destination in 2019. The figures show that 11 Pakistani, 24 Yemeni, 13 Iraqi and four Syrian tourists visited Kashmir last year.

Among 11 Pakistani, five visited the Valley after August 2019.

However, no tourists from conflict-torn countries like Yemen, Iraq and Syria have arrived in Kashmir since August.

A snow-covered train moves on Srinagar- Qazigund railway track in Anantnag district on Sunday. Credit: PTI

A popular destination for Thai tourists

Tourists from Thailand were second on the list, with the country sending 4,572 visitors to Kashmir in 2019. April saw 2,228 Thai arrivals and August saw the lowest, with just 65.

Indonesia with 2,918 and Bangladesh with 2,446 tourists are third and fourth in the list.

Among the tourists who landed in Kashmir in 2019, many belong to the US, Singapore and UK. Around 731 American tourists travelled to Kashmir in 2019. Similarly, 706 tourists from Singapore and 575 from the UK made the trip to Kashmir last year.

The data shows that 326 Israeli and 66 Iranian travellers also arrived in Kashmir in 2019.

As The Wire recently reported, the tourism industry in Kashmir took a big hit after the Centre’s August 5 decision and the subsequent restrictions imposed on movement and communication in the Valley.

The J&K tourism department, responding to an RTI query, noted:

“Yes sir. After issuance of security advisory by the Government of Jammu and Kashmir on 02.08.2019, sharp decline of tourist arrival has been witnessed. The tourist related infrastructure viz Hotels, Huts, Guest houses Paying Guest Houses and Houseboats got abruptly shut and the occupancy came to a very low level. The communications disruptions became one of the hiccups to restore the flow of tourists in Jammu and Kashmir which continued till restoration of the mobile services followed by withdrawal of the Security Advisory by the Govt on 09.10.2019.”