India-Taiwan ties: Sea of possibilities

India-Taiwan-relationsIn the past 18 months, the current government has made substantial efforts to give a further thrust to ties with countries in East and South East Asia and has renamed the ‘Look East Policy’ as the ‘Act East Policy’. The PM has visited a number of countries in this context including China, Japan, Korea, Myanmar, Malaysia and Singapore. While with China, the focus was on strengthening economic ties, with a specific thrust on seeking FDI. During his other visits his emphasis was on bolstering strategic ties as well. The PM also reached out to the Indian community settled in Japan, Korea, Malaysia and Singapore.

While all these efforts are laudable, the Act East Policy can be further strengthened by giving greater importance to Taiwan, since there is potential for building not just economic relations, but also the strategic relationship. As far as the economic sphere is concerned, some headway has been made in recent years, for the year 2014, trade stood at a little less than 6 Billion USD. This is far below potential however, since India is Taiwan’s 19th largest partner, and 16th biggest export market. It would also be pertinent to point out, that Taiwan’s trade with India comprises less than 2 percent of its global trade.

If one were to look at major Taiwanese investments in India; Foxconn a Taiwanese company which had entered India in 2006, and then exited in 2013, will manufacture Xiaomi phones in Andhra. It shall also be investing 5 Billion USD over the next five years in Maharashtra, where it has secured 1500 acres of land for its plant. Other companies like smartphone makers, HTC and ACER and ASUS too are exploring possible opportunities in India. All these brands have become household names in India.

PM-Modi-in-ASEAN-BACThere are a number of reasons for the Taiwanese interest in India. Firstly, there is immense interest in the current government’s Make in India Program. Secondly, the slow-down in China, where Taiwan has invested heavily has prompted the latter to look for alternative markets.

India is also exploring an FTA with Taiwan, while this process was started in 2011 during the earlier UPA regime, the current government has evinced interest in the same. Interestingly, it has refused to sign an FTA with China.

Strategic commonalities

Strategically too, there are significant convergences. While China has taken strong objection to India’s strengthening of ties with Taiwan, in recent years, New Delhi has sought to de-hyphenate the relationship. A clear instance was India’s decision to allow Taiwan to set up a second Taipei Economic and Cultural Center at Chennai (it already has one in Delhi). India has also begun to engage with the Taiwanese leadership.

Inspite of some major strides, the relationship is far below its potential considering the commonalities between both countries.

Why is the relationship far below potential?

Like many other countries in Asia, one of the major reasons for the relationship not having fulfilled its potential, in spite of the leadership is a lack of interaction, and not sufficient people to people contact between both countries. Both sides have sought to address one stumbling block i.e. the visa regime. While for Indian citizens, visa regulations have been eased out; Indians with valid US and UK visas have a visa exemption. Taiwan Citizens are amongst the 113 countries which are eligible for a tourist e-visa.

A number of other issues need to be addressed however. First, with the increasing level of engagement it is important to increase the level of connectivity; the number of flights is certainly not commensurate and no direct flight. The level of connectivity is not commensurate with the level of engagement between business communities on both sides. Second, it is important to understand more exchanges at the student level between both countries, with India. There has been an increase in the number of Indian students going to Taiwan for seeking degrees (600 annually). Taiwanese students should also be encouraged to pursue degrees in India, and also visit India for exchange programs.

If the above issues are addressed, the sky is the limit not merely for the economic and political relationship but even the strategic sphere and greater people to people contact. It is important for both countries not to view bilateral ties from the narrow lens of China, and to give a further push to economic and strategic ties. The current government which has been focusing on seeking Foreign Direct Investment and seeking to redefine India’s ties with East and South East Asia needs to make Taiwan a priority area at par with other countries in East Asia.

Tridivesh Singh Maini is a Senior Research Associate with The OP Jindal Global University, Sonipat.

Disclaimer: Views are personal