NEW DELHI: Looking to flex its trade muscles, an option India has not often resorted to, the Modi government is reviewing its economic engagement with Malaysia and may impose formal checks on shipment of palm oil and electronic goods in retaliation to Kuala Lumpur's stance on Kashmir and Islamic preacher Zakir Naik.

"We are looking at some curbs on refined and crude palm oil as well as electronics. Various ministries are involved in the exercise," a source in the government told TOI. It is perhaps the first such trade retaliation that India has used against a partner country.

India has run out of patience with what it sees as provocative statements by Malaysian PM Mahathir Mohamad on subjects like abrogation of J&K's special status, Citizenship (Amendment) Act and controversial Islamist preacher Zakir Naik, who is facing a probe by the NIA and the ED.