Malaysia said on Tuesday that India's move to cut back on palm oil purchases is "temporary" and will be resolved amicably between the two nations.
Last month, India restricted imports of refined palm oil and asked importers to avoid purchases from Malaysia after its criticism of actions in Kashmir and new citizenship law.
"Having long-standing bilateral ties, the two nations will overcome the current challenges, and prevail towards mutual and beneficial outcomes," the Malaysian Palm Oil Council said in a statement, citing Primary Industries Minister Teresa Kok.
Malaysia's push to implement B20 biodiesel starting this month will also help sustain high crude palm oil prices, the statement read.
Malaysia minister defends Mahathir's Kashmir remarks
Malaysia's Deputy Housing and Local Government Minister Raja Kamarul Bahrin has defended Prime Minister Mahathir Mohamad's criticism of New Delhi's Kashmir policy, saying the PM had spoken as a respected statesman.
He told reporters that Mahathir had a duty to speak up for the people of Kashmir whom he said had been "bullied and oppressed" for a long time.
"I don't think he was wrong in trying to stand up for the weak, as we did for Yemen which should not be attacked by the superpowers," he added, according to Free Malaysia Today.
"We will no longer continue the policy in which Malaysia is a third-world country that needs to be propped up by bigger countries."
Mahathir had in a speech at the recent UN General Assembly session accused India of "invading Kashmir and Jammu" despite a UN resolution on the territory.
His remarks sparked an online backlash, with Indian social media users calling for a boycott of Malaysia.
(With agency inputs)
