India South-east Asia Palm Oil
Recent developments regarding India’s import of palm oil from SE Asia
Oct 20, 2020

For several decades now, India has been importing approximately half of the country's total requirement of edible oils. Most of the edible oil imported by India is refined palm oil or palmolein and much of the imported oil comes from Indonesia and Malaysia. India is the world’s largest importer of palm oil from its largest producers, Indonesia and Malaysia. Both countries have large palm plantations created out of rainforests and irrigated by year-round tropical rainfall. The multinational Wilmar group has been criticised by environmental activists over the years for its involvement in the establishment of mono-cultures of palm trees in place of rainforests, orangutan habitat and ancestral lands of indigenous peoples. The Adani Group is associated with Wilmar through its 50:50 joint venture, Adani Wilmar, which imports large quantities of palm oil into India. India’s second-richest man, Gautam Adani, is the patriarch of the sprawling Adani Group.

On 30 September 2019, Malaysia’s Prime Minister Mahathir Mohamad stood before the United Nations General Assembly (UNGA) and launched an unexpected attack on India, accusing the country of violating the UN’s resolutions by ‘invading and occupying’ Kashmir, referring to India’s decision in early-August to revoke the special Constitutional status granted to Jammu & Kashmir, India’s only Muslim majority state. The subsequent lockdown and human rights abuses had been condemned across the world, but none were perhaps as high-profile as Mahathir’s barbs on the floor of the UNGA.

The Malaysian PM’s remarks were strongly criticised by the Indian government, and supporters of the ruling Bharatiya Janata Party. Reacting to Mahathir’s comments, the Solvent Extractors Association of India (SEAI), a Mumbai-headquartered lobby of some of India’s biggest edible oil companies, issued an unprecedented advisory to its members to stop importing oil from Malaysia. The unprecedented advisory added a geopolitical twist to one of the most fundamental aspects of India’s food security, and also one of its biggest businesses. The SEAI is currently headed by Atul Chaturvedi, former CEO and current board member of Adani Wilmar.

Mahathir’s remarks came at a time when the SEAI was already engaged in a trade dispute with Malaysia. Imports of palm oil from Malaysia increased dramatically in 2019 after a scheduled cut in import duties came into effect on 31 December 2018. SEAI filed for trade protection from the Indian government, claiming that the Malaysia oil imports had put Indian oil companies at the risk of ‘serious injury’. It won the dispute after the government imposed a ‘temporary safeguard duty’ on Malaysian edible oil in September 2019. Malaysia had initially retaliated with its own export duty, and Mahathir then commented against the Citizenship Amendment Act (CAA).

The CAA was passed by the Parliament of India on 11 December 2019. It amended the Citizenship Act, 1955 by providing a path to Indian citizenship for illegal migrants of Hindu, Sikh, Buddhist, Jain, Parsi and Christian religious minorities who had fled persecution from Pakistan, Bangladesh and Afghanistan before December 2014. Muslims from those countries were not given such eligibility. Critics say this was the first time religion had been overtly used as a criterion for citizenship under Indian law.

In January 2020, the Indian government made a major decision to restrict imports of refined palm oil. The oil can now only be imported with a licence issued by the central government. This is the first time such a licence is being demanded for undertaking refined oil imports after the trade was opened up in 1994 as part of India’s shift towards liberalisation and globalisation.   


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