Interaction with the Delegation from the Prospect Foundation
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The Vivekananda International Foundation hosted a delegation from the Prospect Foundation, Taipei led by Dr Mark Tan-sun Chen. The other members of the delegation were Dr Joanne Jaw-ling Chang Chyou, Dr Arthur Shufan Ding, Dr Ming-fang Tsai, Dr Mei-fong Huang, The Prospect Foundation and Ms Yueh-wen Chen. Dr Arvind Gupta, Director, VIF delivered the opening remarks and presided over the session.

The deliberations were held on India-Taiwan’s perspectives on bilateral relations and Taiwan’s New Southbound Policy, development of India’s foreign policy under the Indo-Pacific Security Framework and development of Sino-India Relations. The issues of discussion are described hereafter.

India-Taiwan Relations

The Taiwanese side explained that India-Taiwan relations had progressed positively but the elementary issue remained its unofficial nature. The situation was further aggravated by the shrinking international space of Taiwan. This situation may not be good for the international community because with the shrinking diplomatic space, Taiwan will not be able to contribute much. Notably, Taiwan has advance medical system and is considered to be the best in Southeast Asia. Taiwan’s expertise in medicine is very hard earned. During the Japanese colonialism of Taiwan, the Taiwanese were not allowed to take subjects such as politics, economics and law. Hence they concentrated on the study of medicine.

There are other areas in which Taiwan excels. Further, the delegation underlined that Taiwan had done well in building economic ties with other countries such as Japan and the US even without having diplomatic relations. However, with India, it was yet to gain momentum. They pointed out that there were only 35000 Indian tourists to Taiwan and the two-way traffic was also very low.

Development of India’s Foreign Policy under the Indo-Pacific Security Framework

Taiwanese participant highlighted that there were complementarities between India’s Act East Policy and the New Southbound Policy. In addition, on December 18, 2018, India and Taiwan have signed the bilateral agreements to further boost trade and investment between the two countries. In fact, China does not have any issues with Taiwan’s New Southbound Policy and thus it is up to India and Taiwan to make sense of their relationship under it. Both the sides will have to set the priorities themselves. Besides the on-going US-China trade war has also given the two sides an opportunity to cooperate further.

In the evolving geopolitics, Indian participants underlined the importance of Taiwan. China became a member of the United Nation Security Council (UNSC) in 1971 and Taiwan lost its diplomatic status. If Taiwan had been able to retain some form of diplomatic status, the shrinking of its diplomatic space would not have happened. Against this background, the New Southbound Policy was vital. India-Taiwan relations have a great potential and should be fully advanced.

Indian participants explained India’s foreign policy. The first dimension of India’s Indo-Pacific policy underscores the importance of the Indian Ocean Region (IOR). The second dimension necessitates a peaceful Indo-Pacific to sustain India’s expanding trade and other relations. The third foreign policy dimension is cognitive, which reflects upon security, peace, war and nature of the changing world order. The fourth is the instrumental dimension which includes the use of economic, diplomatic and military leverages. India believes that it has a role in shaping the Indo-Pacific that is guided by the principles of free, open and transparent rule-based order.

On China, the Taiwanese participants stated that China was entering a difficult period and the economy was likely to slow down at the rate of 20-30 per cent. As a consequence of US-China trade-war, consumption among the Chinese people have declined. China was giving preferences to its State Owned Enterprises (SOE’s) and the reforms have not been successful. With reference to the US-China trade negotiation, they said that the US stressed on the enforcement part but Xi Jinping was not in support of it.

Taiwanese Investments in India

The Indian side stated that with the US-China trade war looming large on their investments in China, Taiwanese investments in India needs to go up significantly. Taiwanese companies were facing the heat because China was giving benefits to its own SOEs and the preferential policies that the Taiwanese companies used to enjoy were shrinking. Thus under the New Southbound Policy, Taiwan should look at long term gains from investments in India.

Taiwanese companies could of course invest in Southeast Asia profitably in the short-term, but investments in India will give them long term benefits because of the large size of Indian market. Many of the Taiwanese companies may come to India through the OEM route. India’s domestic market has a lot of potentials, Taiwanese companies can come and invest in India and they can share the market. Taiwanese companies can use India as an export launch pad. The difference between Taiwanese company and Chinese companies was that Taiwanese companies look for ‘return on their investment’ while the Chinese aim at enhancing market share. If the Taiwanese companies decide to invest in India, they would not face some of the political problems they encounter in China. Checks and balances of India’s democracy and rule of law ensures that India will never adopt arbitrary trade policies.

India needs to accelerate cultural linkages with Taiwan, treat Taiwanese suppliers as opportunities, build partnerships for skill training, incentivise licensing of technology, promote brand Taiwan, and signal openness for both greenfield and brownfield investments.

India-China Relations

The Taiwanese participants agreed that India-China relations were going to remain stable in the coming years. The differences will only start appearing if any of China’s core issue is involved. The Indian side explained that India-China relations has evolved over a period of time and it was complex and multi-layered. However, from time to time difficulties arise like the Doklam incident. The other irritants in the bilateral relations are the Sino-Pakistan nexus, China Pakistan Economic Corridor, an unsettled border and the looming trade deficit. Nevertheless, a defining aspect of India-China relations today is the direct involvement of the top leaders of the two countries, PM Modi and President Xi, in the management of the ties.

Overall, there was a consensus that impetus has to be given to India-Taiwan relations from both sides. The China factor would not be a hindrance in taking the relations forward.

Event Date 
June 7, 2019

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