Sun Tzu aptly said- “Your enemy’s enemy is your friend”. India and Taiwan have a common neighbour who believes in the expansion of frontiers by force. India has ignored the existence of Taiwan for a long time and has been carrying on with the legacy of ‘Hindi Chini, Bhai Bhai’. India has so far avoided diplomatic relations with Taiwan, just not to annoy PRC and maintain good friendly neighbourhood relations. Unfortunately, all such friendly gestures have not paid any dividends and China is more and more belligerent in its attitude toward India. China believes in the ‘One China Theory’ and wants all nations to only recognize PRC as ‘China’ and maintain relations with it. There is no place for Taiwan in their scheme of things.
The links between India and Taiwan have gathered good momentum in recent years. The relationship between India and Taiwan is going through some important changes on account of a number of developments. It appears now that India is set to expand its economic ties with Taiwan significantly. India has fired the warning shots, regardless of China’s reaction and It’s a welcome change. Our EAM has often stated that India is strong enough to take independent decisions in its national interest.
HISTORY OF MUTUAL RELATIONSHIP
Taiwan’s relations with Indian leaders go back to the pre-independence era. President of the Republic of China Chiang Kai-shek visited India in 1942 and he insisted on meeting with Mahatma Gandhi and Jawaharlal Nehru, despite U.K. Prime Minister Winston Churchill’s objections. When the Kuomintang retreated from the mainland to Taiwan, these ties got carried over. While India was one of the first non-communist states to recognize the PRC, unofficial ties with Taiwan continued through the 1950s and 1960s.
Taiwan, officially the Republic of China (ROC), is a country in East Asia. The ROC is no longer a member of the UN, having been replaced by the PRC in 1971. India is among the 179 of the 193 member states of the UN that do not maintain formal diplomatic ties with Taiwan. India and Taiwan do not have diplomatic relations so they opened Cultural Centres, in each other’s capital in 1995. This has played a significant role in improving people-to-people contacts, and in the expansion of cultural, economic and academic relations. India and Taiwan have also signed a number of bilateral agreements in the field of agriculture, civil aviation, investments, customs cooperation, double taxation avoidance etc.
STEPPING UP ECONOMIC TIES
Economic cooperation between India and Taiwan got a fillip in the 21st Century after a hibernation of 50 years since Independence. In 2018, India and Taiwan signed a bilateral investment agreement to give a boost to economic ties between India and Taiwan. Presently, more than 100 Taiwanese companies and enterprises are working in India. India – Taiwan trade is growing at a rate of 20% YoY. Both countries are working on free trade agreement (FTA) to remove all barriers in trade and investment, to help create a resilient supply chain system.
SEMI CONDUCTORS CONNECTING FRIENDSHIP
The unprecedented COVID pandemic taught many lessons to the world and India also learnt to be self-reliant. Going by the principle of ‘Atmanirbhar Bharat’ India also started opening up to ‘Make in India’ and manufacturing of all essentials in India. India badly needs semiconductors for various electronics, armament and automobile industries. 70% of these are imported and mostly from China. Indian industries were badly hit when the supply chains from China got disrupted due to COVID.
India’s adversarial relations with China, pandemic-induced disruptions, and Beijing’s weaponization of supply chains have pushed New Delhi to begin reducing critical technology dependencies and building up domestic capacity. Establishing semiconductor manufacturing hubs has been a matter of priority for India in the last few years and Taiwan is a leader in semiconductor manufacturing. India has been keen to bring in as many global players, as possible, in order to develop semiconductor manufacturing facilities in the country and Taiwan is the natural choice for that. The central government has allocated $9 billion for setting up its semiconductor manufacturing ecosystem with the aim of establishing “a global hub for electronics manufacturing and design”. All of this provides an opportune moment for India and Taiwan to enhance their bilateral trade, which indirectly could also benefit Taiwan’s political goals. Semiconductor manufacturing will emerge as a key area for cementing India-Taiwan relations and fostering closer cooperation across a number of other areas including political and diplomatic engagements.
Taiwan has tried to reach out to India, many times. Its carefully crafted New Southbound Policy, which was officially launched in 2016, has served as a roadmap for greater engagement with Taiwan’s potential friends and partners – especially India. To step up the momentum, Taiwan needs to maximize the potential of the New ‘Southbound Policy’ in engaging India and other major actors in the Indo-Pacific region. Given that India is a key focus country within the framework of the New Southbound engagements.
Recent conflicts of interest with the PRC have compelled India to revisit it’s ‘One China Policy’ and there has been a growing sentiment in India that it should establish closer ties with Taiwan. India can forge closer ties with Taiwan on a number of related issues, including boosting trade and economic ties as well as working on critical and emerging technologies. India’s current Foreign Direct Investment (FDI) policy has also been adapted to increase potential investors from countries like Taiwan.
The Indian government has been careful to avoid taking steps related to Taiwan which might worsen already difficult ties with China. This restraint is unlikely to be reciprocated by China on territories that India considers its own, such as Kashmir. India’s ties with Taiwan could serve as leverage in its diplomatic game with China.
India’s trade with the Indo-Pacific region passes through the South China Sea route and a large portion of that goes through the Taiwan Strait. A successful Chinese blockade or invasion of Taiwan would disrupt India’s sea routes. Therefore, India is increasingly concerned about the rising tensions in this extended maritime space and across the Taiwan Strait. It’s time for India to be proactive to safeguard its interests in the Taiwan Strait.
For a long time, the China factor has overshadowed India-Taiwan relations. India’s complex relationship with China also played a role in preventing Delhi and Taipei from intensifying their relationship. However, China’s assertive foreign policy under President Xi Jinping has compelled several countries to find a long-term and viable solution to address their national concerns. China’s reluctance to address India’s territorial concerns and two major Chinese territorial incursions have forced India to rethink its China policy. Consequently, India is making efforts to revamp its Taiwan policy. India has not mentioned its ‘One China Policy’ publicly in any bilateral documents since 2010 and it’s a reflection of India’s new thinking.
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India and Taiwan’s new foreign policies are aligned in expressing official determination to carry forward the present developments in trade, economic, academic and finally diplomatic relations. Sectors like tourism and education also remain largely untapped markets, between two.
Regular diplomatic parleys and visits along with enhanced business ties are the way forward. India should consider some immediate changes to its policy. Firstly, it should join the US, in backing observer status for Taiwan in international bodies /groups like G-7 and G-20. Secondly, regular political interactions should be strengthened. It’s a mutually beneficial partnership for growth and should not be dictated by Beijing’s reactions. India should firmly establish itself as a friendly and trustworthy partner to Taiwan. It will be a missed opportunity for both Taiwan and India if the two sides do not find a way to engage each other purposefully.
Realities in the Indo-Pacific region have changed, and it’s time for New Delhi to deepen its political ties with Taipei. Should New Delhi move quickly with its diplomatic offensive, it may find a warm reception in Taipei. India also needs to build strong economic ties and Taiwan will be too glad to reciprocate with equal warmth. This partnership will be mutually beneficial to both, in several aspects. India’s Taiwan moment has arrived and our leaders would be wise enough to seize it. Certainly, India of the 21st century is strong enough now to ignore China’s displeasure.