Restrictions on import of refined palm oil imposed by India on Wednesday are not country-specific, but the state of relationship between countries do come into play while business decisions are taken, Ministry of External Affairs spokesperson Raveesh Kumar 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,” Kumar said at a press briefing on Thursday while responding to a question on whether the import restrictions targeted Malaysia.

In October last year, following Malaysia’s criticism of India’s actions in Kashmir, the Indian industry had halted purchase of palm oil from the country for about a month. But it resumed purchase in December on commercial consideration.

Earlier this week, in a meeting with palm oil importers and traders, government officials indicated that they should avoid importing from Malaysia as the country had continued to openly criticise India’s policies such as the Citizenship Amendment Act (CAA).

Restricted list

Placing imports of refined palm oil on the restricted list will not only make import of the commodity procedurally difficult, the power to grant the licences would rest with the government. The government has put in place a system for obtaining import licence for restricted items online but the documents required make the process tedious.

While Malaysia is one of the major exporters of refined palm oil to India, other exporting countries such as Indonesia and Nepal have already complained to the government about the move as it would hurt their exports too. India imports about 70 per cent or 16 million tonnes of its annual 24 million tonnes of edible oil requirements.

Domestic refiners hit

An increase in import of refined oil has been hurting domestic refiners who have been asking the government to check import of the item. RBD palmolein imports increased from 1.6 million tonnes in 2014-15 to 2.7 million tonnes in 2018-19.

On the other hand, the import of crude palm oil declined from 7.7 mt in 2014-15 to 6.5 mt in 2018-19, hurting domestic processors further.