New Delhi: With Lai Ching-te, the candidate of the ruling Democratic Progressive Party (DPP), winning the presidential election in Taiwan held on Saturday, India will have more than one reason to smile. Though India and Taiwan do not share official diplomatic relations due to Beijing’s One China Policy, ties between New Delhi and Taipei have been on the upswing in recent times. Despite not sharing official diplomatic ties, both India and Taiwan have set up representative offices in each other’s countries.
At an event in London last year, External Affairs Minister S Jaishankar said that there has been an upswing in the levels of cooperation between the two nations. “We have substantial technology and economic and commercial relations with Taiwan and certainly Taiwan has a reputation when it comes to electronics and of course, more recently with semiconductors. So, there has been an upswing in the levels of cooperation,” Jaishankar said.
India is a major focus area of Taiwan’s new foreign policy, dubbed the New Southbound Policy, adopted in 2016. According to this policy of outgoing Taiwanese President Tsai Ing-wen, the East Asian island nation is striving to broaden exchanges and cooperation with India and five South Asian nations, the 10 member-states of the Association of Southeast Asian Nations (ASEAN), and Australia and New Zealand in areas such as commerce, culture and technology.
This will mean less dependence on mainland China for Taiwan’s economic development. Taiwan is the world’s 22nd largest economy and was dubbed one of the four Asian tigers in the late 20th century, the others being Hong Kong, Singapore and South Korea. Given its border disputes with China in recent years, India has restricted Chinese investments and digital apps. At the same time, New Delhi has raised its level of engagement with Taiwan, especially during Tsai’s presidency from 2016 to 2024. In return, Taiwan has offered its moral support to India in its disputes with China.
Taiwanese media outlets, especially those affiliated with the DPP, have openly come out in support of India during its disputes with China. In June 2017, the official Facebook account of Liberty Times posted in Chinese, “Still the same words: Go India!” in support of India during its 2017 border standoff with China in the Doklam area of Bhutan. In June 2020, after the border clash between Chinese and Indian forces at Galwan in eastern Ladakh, Taiwan News posted a widely shared image of the Indian deity Lord Ram slaying a Chinese dragon on its website as its “Photo of the Day”.
Both India and Taiwan share a vision of a free, open and inclusive Indo-Pacific in the face of China’s belligerence in the region that stretches from the east coast of Japan to the east coast of Africa. This shared vision opens opportunities for cooperation on maritime security, counter-terrorism and disaster management. India is part of the Quad that also includes the US, Japan and Australia, which is working for a free and open Indo-Pacific. This comes amid the deterioration in ties between the US and China.
Meanwhile, economic and commercial ties between India and Taiwan have been rising steadily. Trade volume between India and Taiwan reached $8.5 billion in 2022. India is the 17th largest trade partner of Taiwan. However, according to Jules Shih, Director of the Taiwan World Trade Centre in Chennai, trade volume between the two countries will increase approximately by 50 per cent in the next three years and reach $13 billion.
Speaking at a session on trade, investment and opportunities in Taiwan and south India held in Chennai last year, Simon Lee, President of the Taiwan Chamber of Commerce in Chennai, said that the investments will mainly be in the electronics and non-leather footwear sectors over the next three years.
“Investors in Taiwan are looking at India as a bright future in the next 10 to 15 years,” Lee was quoted as saying. “India will be a manufacturing hub of the world.” India and Taiwan signed a bilateral investment agreement (BIA) in 2002, which came into effect in 2005. An updated BIA was signed by the two sides in December 2018.
As a part of its Act East Policy, India has sought to cultivate extensive ties with Taiwan in trade and investment as well as developing cooperation in science and technology, environmental issues and people-to-people exchanges. Last year, during an interaction with an international media group, then Taiwanese Foreign Minister Jaushieh Joseph Wu said that Taiwan has an “enormous appetite” for expanding ties with India and finalising a proposed free trade agreement between the two sides.
“Our trade relations have been picking up steam. The Taiwanese investors are hungry for India and the semiconductor cooperation between Taiwan and India is being blessed by the top leadership of the two countries,” Wu was quoted as saying. He said that Taiwanese businessmen are no longer finding the Chinese market profitable and Taipei will continue encouraging them to invest in India.
There are around 200 Taiwanese companies in the field of electronics, construction, petrochemicals, machine, information and communications technology, and auto parts operating in India. Both New Delhi and Taipei are actively collaborating on creating a semiconductor manufacturing hub in India. Taiwan produces over 60 per cent of the world’s semiconductors and over 90 per cent of the most advanced ones.
India and Taiwan are also working on an agreement that would allow 100,000 Indians to migrate to Taiwan and work in different sectors. Taiwan is facing a shortage of workers due to its ageing population. India, with its young population, is a source of migrant workers in many countries across the world. Hence, such an agreement between India and Taiwan could only be seen as normal.
Though the agreement was expected to be signed towards the end of last year, it was eventually kept in abeyance after the opposition Kuomintang Party, which is seen as more aligned with China, raised objections ahead of this year’s presidential election. In November last year, then External Affairs Ministry spokesperson Arindam Bagchi said in a media briefing that he hoped the migrant worker memorandum of agreement would be signed as soon as possible because the pact is expected to benefit both parties. Now, with the DPP’s Lai becoming the President, it remains to be seen how soon the agreement will be signed. Indeed, India has several reasons to be happy with the DPP’s victory in the Taiwanese presidential election.
Read more: Taiwan:Ruling-party candidate emerges victorious in presidential election
