Malaysia is the world's second largest producer and exporter of palm oil after Indonesia, and the edible oil contributed to 2.8% of its gross domestic product last year
To be "on cautious side, buyers are preferring Indonesian shipments to avoid any possible impact of higher duties."
The government wants to send a strong signal of its displeasure to Malaysian authorities, the sources said.
India imports palm oil mainly from Indonesia and Malaysia
Malaysian exports of refined palm oil to India, the world's biggest importer of edible oils, jumped 727% in the first half of 2019 to 1.57 million tonnes compared with the same period a year before
If found that the jump in imports have impacted domestic players, the directorate would recommend safeguard duty on the palm oil
India primarily imports palm oil from Indonesia and Malaysia and soyoil from Argentina and Brazil.