INDIA'S VAJPAYEE OFFERS OLIVE BRANCH ON PALM OIL

KUALA LUMPUR, May 15 (Reuters) - Indian Prime Minister Atal BehariVajpayee, on a three-day visit to Malaysia, said on Tuesday his countrywould review its import duties on crude palm oil.The apparent concession to Malaysia, the world's largest palm oilproducer, came the day after the two countries signed a raft of economicagreements."Guided by the considerations of strengthening solidarity with ourASEAN friends, we have now decided to review the import duty on palmcrude," Vajpayee said in a speech to a business conference.India and Malaysia also signed a deal on Monday where New Delhi wouldaccept palm oil as payment for carrying out a $1.5 billion railway projectin Malaysia.Malaysia and Indonesia, the world's number one and number two palm oilproducers respectively, are both members of the 10-country Association ofSouth East Asian Nations (ASEAN)."We shall do so in a way which would safeguard the interests of ourfarmers and yet facilitate import of Malaysia's palm crude for ourunder-utilised refineries," Vajpayee said.He added that India's high taxes on oil were entirely due to its WorldTrade Organisation (WTO) obligations."Just as Malaysia has to protect its Malaysian palm oil plantationsover falling prices, we have to take care of the interests of our farmerswho have experienced similar difficulties," he added.In February, India slapped its heaviest-ever import duty of 75 percenton crude palm oil and 85 percent on refined palm oil. But it kept its dutyon soyoil, palm oil's main competitor, at 45 percent, citing WTOcommitments.In the same speech, Vajpayee said his government would give Malaysia$50 million in credit to import industrial goods from India as part of apush to bolster economic relations.