He told reporters that Mahathir had a duty to speak up for the people of Kashmir whom he said had been "bullied and oppressed" for a long time.
"I don't think he was wrong in trying to stand up for the weak, as we did for Yemen which should not be attacked by the superpowers," he added, according Free Malaysia Today.
"We will no longer continue the policy in which Malaysia is a third-world country that needs to be propped up by bigger countries."
Mahathir had in a speech at the recent UN General Assembly session accused India of "invading Kashmir and Jammu" despite a UN resolution on the territory.
His remarks sparked an online backlash, with Indian social media users calling for a boycott of Malaysia.
On Tuesday, United Malays National Organisation (Umno) Youth leader Mohd. Izwan Mohd. Noor said the Prime Minister had been "reckless" in risking an Indian boycott of Malaysian palm oil.
He also said the current government seemed "hell bent on fighting everyone" even as palm oil exports are on the decline.
However, Raja Kamarul disagreed with Izwan's view, saying it is important to find a balance between economic concerns and standing up for what is right.
"The economy is not everything,a he added. "We have a moral responsibility to uphold and defend the rights of smaller nations."
Izwan, a member of Umno Youth's economic monitoring committee, said
"The time for running our mouths and gaining popularity on the world stage, like in the 90s, has passed," he said in an interview with FMT.
According to news reports, India may review its imports of palm oil and other Malaysian products and an Indian trade organisation has advised its members not to buy palm oil from Malaysia.
Izwan said diplomatic tact was important at a time the Malaysian economy was not doing well.
"Whatever we say, whether in causing alarm over fiscal debt or in quarrelling with neighbours, will have an impact on Malaysia's economy," he added.
He claimed that Malaysia was no longer the darling of investors, now that its neighbours had caught up with or overtaken it in attracting foreign money.
( With inputs from IANS )