Opening Remarks by the Director, The Vivekananda International Foundation

Good afternoon, warm welcome to the delegation led by Dr. Mark Tan-sun Chen, Chairman, the Prospect Foundation.

India and Taiwan share a unique relations. The relationship goes back to 1942 when Chiang Kai-shek visited India and met with Mahatma Gandhi and Jawaharlal Nehru. During his visit he made a statement in support of the Indian independence movement. However, there was a lull in the relations until 1990s with only minimum trade exchange between both the countries.

In 1991 as a part of its ‘Look East Policy’, India started looking towards Taiwan. In 1995 the two countries established representative offices in each other’s capitals, namely Taipei Economic and Cultural Center (TECC) for Taiwan in New Delhi and India-Taipei Association (ITA) for India in Taipei. The Act East Policy started in 2014 has further given impetus to India and Taiwan.

The Act East Policy provides a concrete platform for India-Taiwan economic cooperation. On 16 August 2016, Tsai Ing-wen led DPP government in Taiwan launched the ‘New Southbound Policy’. The policy aims to strengthen the comprehensive trade and economic ties between Taiwan and 18 countries-the members of the ASEAN, South Asia, New Zealand and Australia. India is a very important country under this policy and against the background Taiwan is eyeing a 20 per cent year on year growth in trade with India. Besides this, the ensuing China-US trade war and escalating costs in China have made the Indian economy, as the world’s fastest growing economy, more lucrative to Taiwan.
Taiwanese investment in India is very less/meager. Taiwan’s overall investments in India totaled only around $243 million, representing 0.07 percent of total investment flows India received between April 2000 and June 2017. Similarly, Indian investments in Taiwan over the same period accounted for only 0.04 percent of Taiwan’s overall inward foreign direct investment (FDI). It is interesting to note that while there are 80,000 Taiwanese firm operating in China there are only a few more than 100 Taiwanese companies in India.

Several Taiwanese firms are making important investments in India. Notably, the Taiwanese electronics manufacturing firm Foxconn will build a new plant in Maharashtra to the tune of $5 billion over five years, as part of a larger project to have roughly twelve manufacturing and data centers operational in the country by 2020. The other proposed investments by Taiwan in India are in the Science Park in Tamil Naidu based on the model of Hsinchu Science Park. Taiwan's state-owned, Chinese Petroleum Corporation (CPC) has proposed to invest USD 6.6 billion in petrochemical projects in Paradip in Odisha. Furthermore, a fabric manufacturing firm named Nan Liu has committed to a $20 million investment to construct a factory in Gujarat. Taiwan is also interested in investment in Bamboo Industry in Assam. It wants to invest in solar panels in India.

Beyond these investments, there are also notable joint initiatives being proposed under the ‘Make in India’ banner, such as a $200 million investment agreement between Optiemus Infracom, an Indian telecommunications firm, and the Taiwanese Wistron Corporation to make telecommunications products in India over the next five years. In addition, the Taiwan Electrical and Electronic Manufacturers’ Association (TEEMA) and the smart phone manufacturing firm OPPO plan to form an electronic manufacturing cluster in Noida, which is expected to generate 30,000 local jobs. If most of these proposals materialize, India and Taiwan’s commercial relationship may scale up significantly and this could build momentum for similar investment projects in the future.
Until now, two Taiwan expo has been successfully held in India. The aim of the expo is to continue to promote cooperation and exchanges with India and to assist manufacturers to expand in the markets. On 24 October 2018, the Union Cabinet of India has approved the signing of the bilateral Investment Agreement between ITA and TECC. The development is likely to boost the investment further.

On the geopolitical issue, both India and Taiwan are particularly interested in developments in the Indo-Pacific region particularly in the South China Sea. Taiwan participated in the 2018 ‘Quad-Plus dialogue’ held in Tokyo, when the Institute for National Policy Research (INPR) joined the discussion as the Dialogue’s Plus-partner. Quad-Plus dialogue is 1.5 initiative of four think tanks of India, Japan, Australia and the US.

India has an interest in expanding economic and sociocultural ties with Taiwan and there are several avenues of cooperation between Taiwan and India—including trade, investment, tourism, and education.

Overall, there is room for India-Taiwan people-to-people engagement (including through cultural and other noneconomic links) to generate soft power via academic exchanges, tourism promotion, and developmental assistance programs. Thus economic engagement and people-to-people contact remain the basis of India-Taiwan relations.