Though complex and informal, India and Taiwan's relationship has steadily evolved.
Though informal and under the radar, India and Taiwan's strategic relationship has been evolving in response to shifting geopolitical dynamics, particularly concerning China's rise.
India and Taiwan do not have official diplomatic relations due to India's adherence to the "One China" policy, which recognises the People's Republic of China as the sole representative of China. Despite this, the two countries have found common ground in their economic interests, shared democratic values, and concerns over China's assertive policies. With China being a strategic challenge for both nations, India and Taiwan have cautiously explored areas of cooperation, especially in the domains of trade, technology, and education- a marriage of convenience in the economic and trade sense.
Beyond the economic and technological domains, the common goals for India and Taiwan revolve around freedom, prosperity, and security. While strategic cooperation may not take the form of formal alliances, the alignment between Taiwan's New Southbound Policy (initiated by ex-President Tsai Ing-wen in 2016) and India's policies offers a strong foundation for future collaboration. Both nations have pursued these policies for seven to eight years, and there is significant scope for strengthening partnerships across various sectors.
A New Era
Though complex, India and Taiwan's relationship has steadily evolved from formal diplomatic ties with the Republic of China (ROC) from 1947 to 1950 into a growing, unofficial partnership. The period following India's recognition of the People's Republic of China (PRC) in 1950 saw a halt in formal relations, but both sides kept the door open for future cooperation. This pragmatic approach led to the establishment of representative offices in the 1990s, signalling the start of a new phase of bilateral engagement.
In 1995 Taiwan established the Taipei Economic and Cultural Centre (TECC) in New Delhi, functioning as a de facto embassy. Simultaneously, the India-Taipei Association (ITA) was set up in Taipei to facilitate diplomatic, trade, and cultural exchanges. These unofficial means of diplomacy have been the backbone of Taiwan's and India's successful strategic dialogues in various fields. Taiwan's footprint in India has gradually grown, supporting Indian technology, education and trade.In 2012, Taiwan strengthened its presence in India by opening an office in Chennai to deepen ties with southern India. Last year, Taiwan further solidified its engagement with India by inaugurating a new office in Mumbai, the country's commercial capital.
To further enhance the India-Taiwan relationship, updated statistics reflect the increasing people-to-people exchange between the two nations. Approximately 40,000 Indians travel to Taiwan annually for tourism, education, business, and work, highlighting the growing interest in Taiwan’s opportunities.Around 400 to 500 Taiwanese citizens reside in India and work in various sectors, including business, manufacturing, and education.These people-to-people exchanges are pivotal in building a solid foundation for future cooperation, expanding business opportunities, and creating stronger cultural connections. This movement of individuals also reflects the deepening trust and confidence between India and Taiwan, paving the way for more substantial partnerships.Around 6,000 Indian citizens live in Taiwan, contributing to the two nations' economic, educational, and cultural exchange.
Taiwan’s New Southbound Policy has played a significant role in attracting talent from India, with around 1.5 per cent of Indian students who graduate from Taiwan staying on as skilled workers, a figure that, while still modest, exceeds 100 individuals. Moreover, about 3,000 Indian students are pursuing higher education in Taiwan, drawn by the country's robust academic and research programs.
India is currently ranked as Taiwan’s 16th largest trade partner, the 12th largest export market, and the 25th largest import market. These figures underscore the expanding economic ties, with significant potential for future growth.
Looking forward, Taiwan plans to focus on trade in plastics, rubbers, and the ICT sector, which is becoming a key area of interest. Major imports from India include raw materials essential to Taiwan's industrial base. In a significant regulatory development last month, the Indian government passed a regulation allowing Indian organic agricultural products to be imported into Taiwan, opening new avenues for agricultural trade.
Path to Mutual Growth
Indian External Affairs Minister, Mr Jaishankar, has highlighted the significance of semiconductors and mobility as areas where both nations can collaborate. Taiwan's expertise in semiconductor manufacturing and India's emerging technological base present significant opportunities for joint ventures and knowledge exchange.
Around 40 years ago, Taiwan's economic ministries invited TSMC to invest. Over the next four decades, Taiwan developed its world-class chip manufacturing capabilities, making it a global semiconductor leader.A key factor in this success has been the focus on talent. Continuous investment in skilled workers and long-term industry development has been essential. Taiwan's approach is comprehensive, offering a "one-package solution," which includes chip technology and well-established upstream and downstream factories that support the entire production ecosystem. This holistic approach allows for seamless integration and innovation within the semiconductor industry.
The message is that building an industry of this magnitude doesn't happen overnight. With the right investment in talent, infrastructure, and a long-term strategy, it can transform a nation's economic landscape, just as Taiwan's semiconductor industry has done.
TSMC is not directly operational in India, but Taiwan’s advanced technology sector has made significant strides in engaging with India. TSMC has managers working in India, but the challenge lies in finding and empowering local Indian managers to lead operations, which is crucial for businesses looking to establish a more permanent presence.
Liu Yangwei, Foxconn's chairman, is highly active in India, driving various initiatives to strengthen the company's foothold in the market. Foxconn has made considerable progress in contributing to India's manufacturing sector, and the chairman’s efforts have had a visible impact. By focusing on these strategic areas and addressing the challenges in leadership localisation, Taiwan can continue to build its presence in India, leveraging its expertise in advanced technology and forging stronger economic ties.
Taiwan currently hosts a large number of foreign workers, including 30 million Indonesian labourers. Looking ahead, Taiwan plans to welcome 10,000 Indian workers, though this will require navigating certain bureaucratic and regulatory challenges.One of the most challenging areas of collaboration is the cultural domain, primarily due to language barriers. Taiwan offers language scholarships, which can help bridge the cultural gap. Expanding this program to more universities will encourage greater participation.Food culture differences, for example, reflect broader cultural challenges. While Taiwanese people tend to adapt to diverse cuisines, Indians in Taiwan often avoid local restaurants.
Both India and Taiwan share values of faith, compassion, and charity, with religious organisations like Tzu Chi and Foguang Mountain playing a vital role in humanitarian assistance and disaster relief (HADR). These organisations, known for mobilising quickly during disasters, provide a strong foundation for deeper religious and charitable cooperation between the two nations.
From Education to Supply Chains
Currently, individuals from India go to Taiwan for educational exchanges. However, group programs, like the one organised by TATA Corporation in partnership with PSMC, offer a model for engineering and technical training. With India's first FAB factory set to open in Gujarat by 2026, this collaborative approach can help develop critical talent. Fostering group exchanges across industries and sectors is key to long-term success.
The most pressing issue is the economic domain, especially the supply chain. Taiwan's security is closely tied to India's national interests, as the stability of the South China Sea affects major trading routes across Vietnam, the Philippines, and even Singapore. Ensuring the resilience of Taiwan's supply chain has a cascading effect on regional stability, linking economic security to broader geopolitical concerns.
Key Takeaways
Economic and Technological Potential: The economic relationship between India and Taiwan holds immense potential, particularly in high-tech industries such as semiconductors and electronics.
Subtle Geopolitical Realignment: While neither country openly opposes China, their increasing cooperation can be considered part of a broader strategy to balance China's influence in the Indo-Pacific.
Caution in Strategic Engagement: India maintains a cautious approach to deepening its ties with Taiwan, mindful of the broader geopolitical implications, particularly its relations with China.
