Asean-India summit a chance for Najib to negotiate better trade terms

THE doubling of the palm oil tariff by India is expected to top the agenda when Datuk Seri Najib Tun Razak meets Indian Prime Minister Narendra Modi today.

Their bilateral meeting scheduled on the sidelines of the Asean-India Commemorative Summit here will be an apt opportunity for the Malaysian Prime Minister to raise his concerns.

Last November, India raised its import tax on crude palm oil to 30% from 15%, while duties on refined palm oil were hiked to 40% from 25%, in order to protect its farmers.

This was the highest import tax increase on edible oil by India, the world’s biggest importer of edible oils, in over a decade.

Malaysia is concerned as the tariff rise would dampen its palm oil exports to India.

India imports about 14.5 million tonnes of vegetable oil from Malaysia and Indonesia, two of the world’s largest producers of palm oil, to meet domestic demand.

Officials said Najib was also likely to press for more air traffic rights for Malaysia.

This follows the breakthrough Air Services Agreement, signed by both countries during Modi’s visit here last April.

The target is to raise the number of weekly seats to the six major cities of Chennai, New Delhi, Kolkata, Mumbai, Bengaluru and Hyderabad to 40,436 from 22,531, as well as an extra eight points to the existing 18 secondary cities.

Najib’s official programmes here got off to a good start yesterday with the signing of four MoUs between Malaysian and Indian companies, focusing on small and medium enterprises (SMEs).

These include SME Corp Malaysia and National Small Industries Corp India; Malamega Ltd (Mal) and Puspathy Enclave Pvt Ltd; JS Rezeki Bumi Maju Sdn Bhd and GA Software Technologies Pvt Ltd; and Orchid Life Sdn Bhd and Vimta Labs Ltd.

Speaking to Malaysian journalists here, Najib said the signings would strengthen collaborations between SMEs of both countries.

Najib was among the 10 Asean leaders who joined in a retreat session with Modi under the theme “Maritime Cooperation & Security”.

“We focused on this as the fight against piracy and sea crimes is important,” he said.

On Bank Negara’s decision yesterday to increase the Overnight Policy Rate (OPR) by 25 basis points to 3.25%, Najib said the move was an effort to strengthen the national economy.

“It was about time the OPR was raised to rebalance the interest rate regime.

“We wanted to avoid sticking to a low interest rate regime, which could bring great risk to the country,” he said, adding that the OPR increase would also promote savings.

Najib said the move was also in line with the recent strengthening of the ringgit.

“If we are out of sync with other countries, there will be an outflow of funds,” he added.