In contrast, China and Pakistan together buy 2.4 mt only. Palm oil exports to India made up 15 per cent of Malaysia’s total exports, valued at $1.65 billion, last year.

An industry insider told Swarajya that the move to not sign any new contract with Malaysian sellers was more of a precaution, though they see signs of India acting tough against the Mahathir Mohamad government.

“They are in the business where they don’t want to be caught on the wrong foot if India decides to act tough. It is natural for them to look for other sources like Indonesia to buy palm oil,” the insider said.

He, however, said the Indian government had not even given any informal instruction on palm oil purchases to them.

The views of importers and refiners could perhaps be that Malaysia has tested India’s patience too much. Relations between both nations haven’t been good ever since Mahathir assumed power.

When asked about Indian importers and refiners not buying palm oil from his country, the Malaysian Prime Minister shot back saying India, too, exported goods to Kuala Lumpur.

But rushing to salvage the situation on Tuesday, Teresa Kok, Malaysian minister dealing with palm oil, said her country was planning to buy more raw sugar and buffalo meat from India.

She admitted that she was aware of the issues threatening trade between both nations. In an article, Malaysia Chronicle said Kok’s gesture would not probably work as the Indian Prime Minister is seen as more "defiant and stubborn".

The industry insider wondered: “Even Islamic countries like Saudi Arabia and United Arab Emirates have supported India on the Kashmir issue. Why should not Malaysia look at them and draw lessons?”

In the hindsight, the External Affairs Ministry’s statement could have come after the Modi government felt that Kuala Lumpur has repeatedly been snubbing India for the last couple of years.

Before the current imbroglio, the Malaysian government had refused to repatriate Islamic hardliner Zakir Naik, who has been accused of promoting terrorism and hatred in India.

Kuala Lumpur is also not helping India to get hold of Malaysian businessman T Ananda Krishnan for investigations into the controversial Aircel-Maxis deal. This has resulted in the case dragging on for years.

Mahathir is also seen as being more friendly with the Congress and its president Sonia Gandhi. During the Atal Bihari Vajpayee regime, he had refused India’s request to get the main accused in the Bofors scandal Ottavio Quattrochi extradited to New Delhi from Malaysia, where he was stationed then.

Much to the chagrin of Malaysia, its neighbour Indonesia is set to gain from this stand-off. Already, its share of Indian palm oil imports is rising.

Jakarta has also come forward to buy more raw sugar from India, switching over from its Thailand and Australian sources, if New Delhi cuts import duty on palm oil.

Duty on Indonesia palm oil imports is five percentage points higher than Malaysian oil, and Jakarta is trying its best to wrest control of the situation on the levy front.

India is inclined favourably to this proposal since it is saddled with sugar stocks which are affecting the functioning of the sugar industry. New Delhi can also offer wheat to Indonesia.

In the late 1990s, Indonesia had proposed barter trade with India, offering to buy pharmaceuticals, sugar and other products in return for palm oil and timber.

At that time, the government in Indonesia was seen as not reliable and India ran into problems trying to convince Jakarta to open an escrow account in Singapore where the proceeds of the trade could be deposited.

The current Indonesian dispensation is far more reliable than the Suhartos and therefore, there could be even possibilities for barter trade.

For now, Malaysia has bitten more than what it can chew. Probably, Mahathir has taken things too far that India has been forced to act.

Kuala Lumpur might get a chance to assuage India when Modi travels to Bangkok next month for the summit of leaders of Regional Comprehensive Economic Partnership Bloc on 4 November.

Malaysia has to act as Mahathir and his government have come under flak for their anti-India stance that will likely affect oil palm growers and industry soon.

It has even resulted in one critic remarking: “Mahathir has to have palm oil for breakfast, lunch, and dinner the way he is handling relations with India.”

An agricultural trade expert says that the best way for India to retaliate against such tactics of Malaysia and Turkey would be to raise the duty on their products that are imported here to "very high levels".

India also imports natural rubber from Malaysia. It imports marble, products of automotive and textile industry, copper and copper ore, iron, steel, gold, coal, chrome, poppy and cumin seeds from Turkey, an ally of Pakistan which had raised the Kashmir issue at the UN last month.

It will make such imports unviable while breaking the back of those sectors in those two countries.