India, Indonesia negotiating economic cooperation
Topics: INDIA INDONESIA ECONOMIC
The move will also “balance” the two countries’ trade interests.
Sources have confirmed that India and Indonesia will soon intensify efforts to explore ways and means to deepen trade and investment relations.
This move comes amidst the standoff with Malaysia, from which India has been buying the bulk of its palm oil but is now shifting its business to Indonesia as a reaction to Malaysian Prime Minister Mahathir Mohamed’s continuous tirade against India.
India’s move on having a CECA with Indonesia has come at a time when the relationship between India, the world’s biggest edible oil buyer, and Malaysia, a key supplier, is on the verge of collapse.
India had imported 4.4 million tonnes of palm oil from Malaysia in 2018-19.
India and Malaysia had signed the CECA in 2011, building upon the 2009 India-Asean free trade pact.
Incumbent Malaysian Prime Minister Mahathir Mohamad has taken an anti-India stand and criticised the promulgation of the Citizenship Amendment Act (CAA).
Following his comments, India has slapped import restrictions by limiting the import of palm oil from Malaysia.
Indonesia is the world’s biggest producer of palm oil, but India imports 30% of its palm oil needs from Malaysia too and the reason behind this is the lower price of the Malaysian variety due to the CECA signed between India and Malaysia, enabling to keep costs low. ■