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Expanding Indo-Taiwan ties

Considering the indifferent state of relations between India and Taiwan for the past many years, it is not surprising that the visit of a Taiwanese delegation to Chennai last week comprising parliamentarians, academics, think tank analysts and business representatives should have passed unnoticed. It was part of an effort undertaken by the Taiwan Economic and Cultural Centre situated in New Delhi in conjunction with the India Taipei Association in Taipei to explore avenues for strengthening and expanding the economic and cultural ties between the two countries.

The Chennai Centre for Chinese Studies (CCCS) and the Federation of Indian Chambers of Commerce and Industry (FICCI) took the commendable initiative of arranging an interaction of the delegation members with prominent public figures and experts knowledgeable in East and South East Asian affairs to identify areas of mutual interest and collaboration.

There is much for India to learn from Taiwan, which emerged from the Japanese colonial rule at about the same time as India attained Independence. It did not take more than a couple of decades for Taiwan to grow into a veritable Tiger. It is now an industrial and commercial powerhouse, pre-eminent in a wide range of economic activities, including manufacturing, electronics, petroleum refining, chemicals, textiles, iron and steel, cement, automobile components, pharmaceuticals and so on.

Just look at the relative statistics of what this tiny country of the size of Kerala State in India, with a population of 23 million (as against Kerala’s 31 million) has achieved: For starters, it is surplus in power and enjoys a high trade balance. Its foreign exchange reserve is the same as that of India. Its per capita income is $30,000 whereas India’s is $1000. Its overall trade is $466 billion while India’s is $ 388 billion, with a GDP of $380 billion (growing at 5.7 per cent) which is one-third of India’s $1 trillion (growing at 8-9 per cent). India’s trade with China, Japan, and the US is around $37 billion, $10 billion and $30 billion respectively, compared to $116 billion, $65 billion and $62 billion of Taiwan.

‘One China’ policy

Taiwan’s investment in China come to $200 billion whereas it is an unmentionable $116 million in India with which the volume of Taiwanese trade is $ 3 billion or less than one per cent of the total. There are only about 60 Taiwanese companies (from all sectors) in large Indian cities – Mumbai, Delhi, Chennai and Bangalore – of which as many as 30 are electronics manufacturing companies. Many of them are yet to start their operations. The number of Indian software engineers in Taiwan is a minuscule 2000.

Actually, if both countries join to exploit the complementarities in their capabilities, the scale of their business can easily touch $10 billion or more. For instance, Taiwan’s strength in hardware can be meshed with India’s in software. The scope is immense for mutually beneficial cooperation in areas such as electronics, infrastructure, machine tools, biotechnology, automobile parts and petroleum refining. At the moment, Taiwan is putting nearly all its eggs in the Chinese basket. China is its largest trading partner and top export market. It is to the interest of Taiwan to diversify the destinations for its investible funds, and there can be no better destination than India.

Further, the India-China-Japan- Taiwan quadrilateral can serve as a zone of peace, cooperation and economic growth, bringing affluence and prosperity within the reach of all.

So, what is holding up action on both sides? A member of the delegation made the revealing statement that Taiwanese visiting India, looking for opportunities for investment and trade, did not feel welcome, except in Tamil Nadu. That is why that State has been able to attract a predominant measure of investments from Taiwan so far.

Second, the Central and State Governments as also Indian business enterprises have been hobbled by the One China policy to which India stands committed. This acts as a drag on any departure from the status quo. Even establishment of embassies is taboo. Both countries have shied away from drawing up any comprehensive blueprint for economic and strategic partnership for fear of offending China.

The conclusion of the Chennai interaction was that it was time India shook itself off these inhibitions and pursued what it legitimately regarded as its enlightened self-interest with reference to Taiwan.

(The writer, Mr B.S.Raghavan, IAS (Retd) is Patron of the Chennai Centre for China Studies, Chennai, India, Email:

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