Malaysia is too small of a nation to respond to India's boycott of palm oil with trade retaliation, Prime Minister Mahathir Mohamad said on Monday.

"We are too small to take retaliatory action. We have to find ways and means to overcome that," Mahathir told reporters in Langkawi, a resort island off the western coast of Malaysia.

>> India says no meeting with Malaysia in Davos as palm row simmers

India, the world's largest edible oil buyer, this month halted Malaysian palm oil imports after Mahathir's comments criticising New Delhi over its policy on Kashmir.