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Economic consequences will follow if countries take anti-India line, India’s message to the world is loud and clear

Power punch

Akshay Narang by Akshay Narang
10 January 2020
in Opinions
India superpower
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Remember how former Pakistan Prime Minister Nawaz Sharif had called his Indian counterpart, the then PM Manmohan Singh dehati aurat? The UPA government had refused to act against Pakistan even after the latter’s uncouth and uncivilised remarks against the then PM Manmohan Singh. 

However, with the Modi government at the helm of affairs, countries trying to insult India are being made to pay in terms of dire economic consequences. The latest example is Malaysia.

Earlier this week, the Modi government took a bold decision of restricting imports of refined palm oil and palmolein. The move comes as a telling blow to Malaysia, which under the leadership of its 94-year-old Prime Minister Mahathir Mohamad, has consistently taken an anti-India stand in the last one year, and therefore, the Ministry of Commerce and Industry has put the restriction on import of refined palm oil. The bilateral relations between India and Malaysia have been in a state of free-fall since Malaysian PM Mahathir’s rant against India at the United Nations General Assembly where he claimed Kashmir has been “invaded and occupied”. Malaysia has also been critical of the recent Citizenship Amendment Act passed by the Indian Parliament. 

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Ministry of Commerce and Industry issued a notification declaring that the import of palm oil “is amended from ‘Free’ to ‘Restricted’.” Now, Ministry of External Affairs spokesperson Raveesh Kumar has said that the restriction on palm oil imports is not country-specific, rather it is product-specific. But he also added that the relationship between the two countries does come into picture when such decisions are taken. He said, “It is not a country-specific restriction. It is product specific. Imports of refined palm oil has not been stopped. There will just be some procedures that would be put in place….The state of relationship (with a trade partner) is one of the factors that businesses look at before doing business.” 

Status of relationship between 2 countries also impacts business: MEA on commerce ministry notification on banning import of palm oil

— Sidhant Sibal (@sidhant) January 9, 2020

Raveesh Kumar’s remarks make it clear that India’s deteriorating relations with Malaysia, owing to the latter’s 94-year old Prime Minister, Mahathir’s anti-India utterances, factored heavily in India’s decision to declare product-specific curbs on the import of Palm oil. This move is going to hurt Malaysia substantially, which seems poised to face major losses due to the restrictions imposed by India. Commenting on the latest decision, a Mumbai based refiner said, “This move in a way will punish Malaysia and will help local refiners as well.”

The importance of restrictions on Palm Oil imports can be gauged from the fact that Palm Oil accounts for nearly two-thirds of India’s total edible oil imports. India buys more than 9 million tonnes of palm oil annually, mainly from Indonesia and Malaysia. About 96-98% of palm oil consumed by India is imported. Imports from Malaysia had skyrocketed from 6, 26,362 Metric Tonnes (MT) in 2016-17 to 25,96,225 MT in Jan-June, 2019 (on an annualised basis), showing an increase of whopping 314 per cent whereas the imports from other countries declined from 23,15,292 MT in 2016-17 to 7,25,210 MT in Jan-June, 2019.

India is a major market for Malaysian Palm Oil. In fact, the Malaysian Palm Oil industry is in for a rude shock as Palm Oil demand could plummet with India’s import restrictions and this approach could devastate Malaysia’s palm oil industry.

With this move, India has sent across a loud and clear message- you cannot question India’s sovereignty by interfering in her internal matters and then get away with it. India will make you pay for such unwarranted diplomatic interference. Mahathir’s provocative, anti-India remarks, especially those suggesting that India has “invaded and occupied” Kashmir at the UNGA session have not gone down well with India. And India is making him pay for alienating India, even with knowledge of the fact that Malaysia exported palm oil worth $1.65 billion to India in 2018. 

Last year, India had taken similar action against Turkish defence company Anadolu Shipyard, barring the company from entering the Indian defence market. This had come after Turkish President Erdogan’s provocative, anti-India stance on the issue of Kashmir during his UNGA speech last year. New Delhi is, therefore, leveraging its market and economic muscle to retaliate against those who try to impinge upon India’s sovereignty by interfering in her internal matters. 

The manner in which India is using its economic might to punish Malaysia over its continuous anti-India rhetoric shows that India has grown into a power to reckon with.Such show of economic strength is peculiar to superpowers like the US and China which time and again resort to economic sanctions, which are cheaper and more effective in compelling adversaries than traditional military power, in order to arm-twist those interfering in their sovereign matters. 

During the first tenure of the Modi government, India resorted to pre-emptive strikes in order to inflict damages upon Pakistan for fomenting terrorism against India. With Malaysia, India has gone a step further by restoring to harsh economic measures for the Southeast Asian country’s unsophisticated interference with India’s internal matters. India is making it amply clear that dire economic consequences will follow for countries that take an anti-India stance. Make no mistake, the curbs on Palm Oil imports, India has announced her emergence as a superpower on the global scenario. 

Tags: IndiaIndia SuperpowerMalaysiaPalm oilUS
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