india taiwan relations

Introduction

India and Taiwan, two influential players in the Indo-Pacific region, are charting a new course in their bilateral relations. Historically, the ties between the two have been ‘unofficial’ yet cordial, largely due to the geopolitical complexities and the shadow of Chinese influence. However, the contemporary international landscape, marked by the COVID-19 pandemic, China’s increasing assertiveness, and Taiwan’s critical role in regional geopolitics, has spurred India to recalibrate its stance towards the island nation. Under the Democratic Progressive Party (DPP), Taiwan is simultaneously seeking to diversify its international engagements, striving to alleviate its dependence on China and thwart Beijing’s attempts to isolate it globally. This article, inspired by insights from the ORF-TAEF report, delves into the burgeoning commercial ties between India and Taiwan and suggests strategic measures to further fortify this promising partnership.

Unofficial Ties: The Bedrock of India-Taiwan Relations

The relationship between India and Taiwan has always thrived on ‘unofficial’ ties. The establishment of representative offices, serving as de facto embassies, is a testament to the countries’ mutual desire for closer relations while navigating the sensitivities of international diplomacy. Despite the absence of formal diplomatic ties, these offices have facilitated a multitude of engagements ranging from cultural exchanges to economic cooperation, laying a solid foundation for the current and future state of India-Taiwan relations.

The Shift: Catalyzing Factors in the New Era

The transformation in India-Taiwan relations didn’t occur in a vacuum. Several factors have catalyzed this shift, most notably the COVID-19 pandemic. The global health crisis exposed vulnerabilities in supply chains, particularly those over-reliant on China, prompting countries to diversify their economic partnerships. For India, this meant looking towards alternative partners like Taiwan, known for its prowess in technology and manufacturing.

Furthermore, China’s aggressive postures in the region have been a cause for concern, propelling India to strengthen ties with like-minded democracies. Taiwan’s strategic location and its contentious relationship with China make it an indispensable ally for India in its pursuit of a free and open Indo-Pacific.

Taiwan, under the DPP, has been proactive in its ‘New Southbound Policy’, aiming to enhance cooperation with South and Southeast Asian countries. This policy aligns with India’s ‘Act East Policy’, creating a convergence of interests that underscores the strategic importance of robust India-Taiwan relations.

Economic Frontiers: The Growth of Commercial Ties

The burgeoning economic partnership between India and Taiwan is arguably the most dynamic facet of their relationship. According to the ORF-TAEF report, bilateral trade has been on an upward trajectory, touching almost USD 7.7 billion in 2021. Taiwanese investments in India are also seeing a surge, with significant capital flowing into sectors like information technology, healthcare, and auto components.

One of the key areas of collaboration is the technology sector. Taiwan, a global leader in semiconductors and electronics, holds immense potential for India’s aspirations in digital innovation and manufacturing. The push for ‘Make in India’ and ‘Digital India’ finds synergy with Taiwan’s expertise, presenting opportunities for joint ventures, knowledge sharing, and skill development.

Furthermore, the Small and Medium Enterprises (SMEs) sector forms an essential part of the economic dialogue. Both India and Taiwan recognise the role of SMEs in innovation and job creation. Collaborative initiatives have been undertaken to provide these enterprises with the resources, market access, and technological acumen needed for international competitiveness.

Policy Recommendations: Pathways to a Stronger Partnership

To further enhance India-Taiwan commercial ties, the ORF-TAEF report suggests several policy recommendations. Firstly, there’s a need to expedite discussions on trade agreements. A Bilateral Investment Agreement or a Free Trade Agreement could provide the necessary legal framework to protect and encourage investments.

Secondly, facilitating people-to-people exchanges through eased visa policies, educational scholarships, and cultural programs can foster mutual understanding and goodwill, an essential soft power component.

Thirdly, India and Taiwan should prioritize joint R&D projects, particularly in fields like Artificial Intelligence, 5G, and green technologies. Establishing technology parks or innovation hubs could stimulate research, attract talent, and catalyse the commercialization of innovations.

Finally, both countries need to enhance their strategic dialogue, encompassing not just economic and cultural aspects but also regional security concerns. Regular consultations between policymakers, experts, and business leaders can facilitate a comprehensive approach to bilateral relations.

Conclusion

The strengthening of commercial ties between India and Taiwan marks a new chapter in their bilateral relations, set against the backdrop of shifting geopolitical currents. The convergence of democratic values shared strategic interests, and complementary economic capabilities provides a unique opportunity for both nations to forge a partnership that transcends traditional diplomacy. As they navigate the challenges and prospects of this evolving relationship, the role of commercial ties remains pivotal in realizing the full potential of India-Taiwan cooperation.