The bilateral relationship between India and Taiwan has historically been characterised by a sense of self-imposed caution, on both ends, with India employing soft balancing strategies. Taiwan is a unique political actor on the international stage due to the lack of recognition accorded by many countries, including India, despite it being a vibrant democracy. The Chinese have staked claims on the territory, as part of itsOne China principle. Thus, most countries find it challenging to balance the political implications of fostering ties with Taiwan and China.
Taiwan underwent drastic change in the political sphere in 2016, as Tsai Ing-wen was elected as President. This marked a growing shift away from financial dependence on China. Under her leadership, Taiwan constituted the New Southbound Policy, with an aim to diversify its trading and investment partners, through engagement with 18 South and South-East Asian countries. Under this policy, India is a focal point of Taiwan’s current strategy of policy outreach.
After the announcement of the results of the Indian General Elections on May 23rd, 2019, Reuters reported that both countries will strengthen their bilateral trade and cultural ties. Taiwan is looking to increase trade with India by 20% as part of the aforementioned New Southbound Policy and due to the escalating costs of the US-China trade war. In 2018, Taiwanese investment in India reached $360 million. In 2018, the total bilateral trade between India and Taiwan was pegged at US $7 billion, which is a 5-year high, after an 11% increase from 2017. India emerged as Taiwan’s 16th largest trading partner.
At present, India exports mineral fuels, steel, iron, organic chemicals, maize and oil seeds to Taiwan, and imports machine tools, electric machinery and equipment, plastics and organic chemicals from Taiwan. However, both countries realise that there lies an opportunity for deeper engagement, albeit within the context of Indo-Chinese relations, given the complementary nature of India’s Act East Policy and Taiwan’s New Southbound Policy. For example, in January 2019, China issued a warning to India against the provision of military technology to Taiwan, after an Indian firm reportedly submitted a proposal to Taiwan for building submarines.
In December 2018, India and Taiwan had signed a new bilateral investment treaty, as an upgradation of the treaty that was originally signed in 2002. More than 106 Taiwanese companies like Foxconn, MSI and Gigabyte are already present in India. From May 16-18, 2019, the 2nd edition of the Taiwan Expo took place in New Delhi.
The Indian government’s initiatives like Make In India, Digital India, Smart Cities and Start-up India also make the country an attractive investment destination for Taiwanese business. Moreover, the opportunities for profit present in the Indian market has multiplied with improvements in the business ecosystem (overhaul of the indirect tax structure and consolidation of bankruptcy laws). India’s standing in the World Bank Ease of Doing Business 2018 saw an improvement of 53 positions, to the 77th place.
On the other hand, Taiwan is a global leader in ICT and has expressed interest in developing the auto, electric vehicle and technology sectors in India. This is relevant for India because of its desire to transition into a knowledge economy, as a differentiating factor in comparison to other emerging economies.
India and Taiwan have the potential to increase collaborations in terms of education, tourism, high-level exchanges, in addition to economic ties governed by trade and investment.
India Outbound
May 27, 2019
source https://indiaoutbound.org/burgeoning-indian-taiwanese-relations/
No comments:
Post a Comment