Indonesia may ease restrictions on import of automobiles and solar equipment from India in return for shipping higher quantities of palm oil, following a government move to license the import of the edible oil, which is seen to be targeted at Malaysia. Indonesian trade minister Agus Suparmanto Subagio, who met commerce & industry minister Piyush Goyal in Davos, is also expected to visit India over the next month to discuss details of an enhanced trade engagement with India. As reported by TOI last week, India has already pushed for export of sugar, rice and bovine meat to its Asian trading partner, while pointing out that higher imports should not push up the trade deficit with Indonesia.
Sources told TOI that Malaysia maintains import restrictions for several commodities, including sugar, as well as goods such as automobiles, which may be reviewed following India's trade retaliation against the country. Restrictions on import of refined palm oil are already in place, although the government has refused to formally announce action against Malaysia. It is now looking to extend the curbs to include micro-processors, while putting in place quality standards for telecom gear,in an action seen to have been triggered by Malaysian Prime Minister Mahathir Mohamad's comments on Jammu & Kashmir and the Citizenship Amendment Act, as well as his government's reluctance to extradite controversial preacher Zakir Naik.
For Indonesia, the trade curbs on Malaysia have come as a bonanza. Indonesia is the world's largest producer of palm oil, while India is the largest importer of the commodity. During 2018-19, India's trade with Indonesia was estimated at over $21.1 billion, with exports pegged at $5.3 billion and imports of $15.8 billion. Ships and boats ($735 million), organic chemicals ($630 million) and vehicles ($559 million) were among the top export items from India. Oil ($7.3 billion) and edible oil ($3.4 billion) topped the list of items in the import basket.