The government of Malaysia, the world’s second-largest palm oil producer behind Indonesia, is negotiating with an Indian state-owned railway company to get a new rail line built at the west side of Peninsular Malaysia with 70 percent of the costs paid in palm oil, according to a report by Indian business website MoneyControl.

The report said that Malaysia was in talks with Indian Railway Construction Limited, or Ircon, a transport infrastructure company. The entire 700-kilometer railway line would cost around $1 billion.

“We are looking at this project in Malaysia and checking whether they can pay 70 per cent of the project cost in the form of palm oil,” SK Chaudhary, Ircon’s chairman said.

He added that the talks, which were at a preliminary stage, involved the design and construction of a line running along the west coast of the country, with one terminus near Kuala Lumpur.

This is not the first time India is opting for such a barter deal with Malaysia. In early 2000, both countries had signed a deal for the construction of a 31.5-km railway line between Ulai to Tanjung Pelapas in return for palm oil.

But using palm oil as a currency in this deal seems to make sense. India is the world’s largest importer of palm oil in the world , buying some nine million tonnes worth around $5.4 billion annually.

According to Investvine