Davos Diplomacy Likely between India and Malaysia Amid Palm Row: Official

Kuala Lampur/New Delhi: Trade ministers from India and Malaysia are likely to meet on the sidelines of the World Economic Forum's annual meeting in Davos next week amid a palm oil spat between the two countries, a Malaysian government spokesman told Reuters on Friday.

The Indian government has repeatedly objected to Malaysian Prime Minister Mahathir Mohamad speaking out against recent policies which critics say discriminate against Muslims.

Malaysia, a Muslim-majority nation, is the second biggest producer and exporter of palm oil and India's restrictions on the refined variety of the commodity imposed last week has been seen as a retaliation for Mahathir's criticism of New Delhi's actions.

Union Commerce Minister Piyush Goyal denied on Thursday that the government was trying to hit out at Malaysia in particular. The row between the countries, nevertheless, pushed benchmark Malaysian palm futures to its worst weekly decline in more than 11 years on Friday.

No agenda has been set for the proposed meeting between Goyal and his Malaysian counterpart Darell Leiking, the spokesman for Malaysia's Ministry of International Trade and Industry said, adding that the request for a meeting had come from India.

An Indian government source said a meeting was indeed likely with Leiking. A spokeswoman for India's trade ministry did not immediately respond to a request for comment.

Reuters reported on Thursday that Malaysia does not want to escalate the palm spat with India by talking of any retaliation for now, after Mahathir's media adviser called for tighter regulations on Indian expatriates and products. Malaysia instead wants to rely on diplomacy.

Two other Indian government sources said the country expects Mahathir to tone down his criticism of Indian domestic policies. Another reason for frosty ties between the countries is the continued presence of controversial Indian Islamic preacher Zakir Naik in Malaysia, said one of the sources.

Naik, who faces charges of money laundering and hate speech in India, has lived in Malaysia for more than three years and has permanent residency in the country. He denies the Indian accusations.

The sources declined to be identified as they were not authorised to talk to the media.