Indian Defence Review

A lot of media attention is often given to the major shifts in India’s ties with US, Japan and South East Asia and Israel in the past two decades, as a consequence of not just the economic reforms of 1991, but the changing geo-political scenario globally in the past 25 years. The current government is trying to give a further push to strengthening ties with the US, Japan, ASEAN as well as Israel. 

What goes unnoticed at times is the potential role of Taiwan, not just in the economic context, but also in the strategic context for India. The fact that slowly but surely, New Delhi has sought to de-hyphenate the New Delhi-Taipei relationship from the New Delhi-Beijing relationship which too has witnessed an upswing in itself, demands that greater attention be paid to the bilateral ties between India and Taiwan.

Some of the important illustrations of the above two points include; firstly New Delhi’s decision to give a go-ahead to the setting up of the Taipei Cultural and Economic Centre in Chennai (in addition to the one at New Delhi), much to the chagrin of China. Apart from that, India has agreed to have a Free Trade Agreement (FTA) with Taiwan, something which it has denied China.

While the announcement with regard to the FTA was made in 2011, the Modi government too is pushing for an FTA with Taiwan which will significantly increase the level of bilateral trade between both countries (for the first 5 months of May, 2015 it stood at over 2 Billion USD). This period also witnessed a nearly 12% rise in export of Taiwanese machine tools to India.

Taiwan on its part too has sought to not just strengthen economic cooperation, but has considerably eased out its visa regime with an eye on not just businessmen, but even tourists. Indians with valid US and UK visas have a visa exemption. Taiwan is on the list of 113 countries which are eligible for an Indian tourist e-visa.

Yet, there is room for much greater cooperation.

Firstly, Taiwan can be an important partner in strengthening the ‘Make in India’ program. Already, Foxconn has re-entered the market, after exiting in 2013. It will manufacture Xiaomi mobile phones in Andhra Pradesh, and is also going to invest 5 Billion USD over a period of 3 years in a manufacturing unit in Maharashtra. With a focus on make in India, the demand for Taiwan’s machine tools is also likely to increase.

Taiwan also needs to look at new markets for its investments, and given the Chinese slowdown, India could be an attractive destination.

Second, Taiwan with its strategic location is also important for India’s Act East Policy. While PM Modi has visited a number of South East Asian countries as well as Japan, China, Australia and Mongolia. Strategically too, there are important convergences between both countries and there are some strong similarities between both countries.

Taiwan like India has sought to distance itself from authoritarian forms of government. Secondly, it has laid great emphasis on the English language, and this has benefited it not just economically, but also integrating globally. These two commonalities are important cornerstones of a robust partnership.

Some of the important steps which India needs to take on its part are. First, just as India has begun to shed its hypocrisy in the context of its Middle East Policy, US and South East Asia. India needs to do the same in the context of Taiwan. While the earlier UPA Government and even the current government has taken some positive steps, a greater thrust is needed in doing so.

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Second, if the national government is reticent in engaging with Taiwan, state governments where Taiwan has invested heavily should enhance their interactions and reach out to investors. Some of the states which can easily increase the level of engagement with Taiwan are Gujarat, Karnataka, Andhra Pradesh, Maharashtra. While chambers of commerce have begun to play an important role and a number of exhibitions have begun to be held in both countries, efforts should be made to increase the frequency.

Finally, Taiwanese complain of a lack of awareness of India, due to lack of people to people-to-people interactions and educational links on the one hand, while businessmen complain of red tape as one of the major impediments to the relationship. These need to be addressed, but most importantly New Delhi needs to think imaginatively in both the economic and strategic spheres and ensure that its relations with other countries in the region do not dictate New Delhi-Taipei ties.

Courtesy: http://southasiamonitor.org/detail.php?type=sl&nid=14659