India remains a huge market for Malaysian palm oil exports, but recent changes in its import duty is proving to be a challenge, said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong.

He said palm oil played a significant role in trade between both countries, as India is Malaysia's second biggest export market for palm oil and palm-based products.

Last year, Malaysia exported 3.13 million tonnes of palm oil and palm-based products worth US$2 billion (US$1=RM4.19) to India and palm oil exports to the country alone stood at RM7.16 billion, making India the largest export destination for the Malaysian key agricultural commodity.

"However, maintaining our market share in India is challenging, especially with the recent changes in the duty structures of imported edible oils as announced by the Indian government," he said during the Globoil India 2017 industry Conference in Mumbai on Thursday.

Last month, the Indian government doubled crude palm oil (CPO) import duty to 15 percent and raised refined, bleached and deodorised palm olein import duty to 25 percent.

The decision favoured Indian domestic players, and may reduce refined palm oil imports.

Despite these challenges, Mah said Malaysia would continue to work closely with India to encourage new trade and business opportunities in the palm oil sector, covering both the food and non-food sectors.

He noted that India consumed more than 23 million tonnes of oils and fats per year, accounting for 11 per cent of the total global consumption.

"India is the largest importer of oils and fats, accounting for 18 per cent of the total global import," he said, adding that the Indian market for edible oils is expected to grow due to rising incomes and growing urbanisation.

Meanwhile, Mah said Malaysia would continue to develop its palm oil industry in a sustainable manner.

"Malaysia has established the Malaysian Sustainable Palm Oil (MSPO) scheme, which will be made mandatory by 2019 for players in the industry," he said.

Malaysia's total output of crude palm oil in 2016 stood at 17.3 million tonnes, or 29.4 per cent of the global production. -- BERNAMA