India-Taiwan: Business Opportunities Ahead

India-Taiwan: Business Opportunities Ahead

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The deteriorating China-US trade war and escalating costs in China have made the India, as the world’s fastest growing emerging economy, more lucrative to Taiwan.

A few governments around the world are likely to emerge from the pandemic with a stronger standing than before and Taiwan is one of them. Taiwan is eyeing sufficient growth in trade with India in the backdrop of the New Southbound Policy (NSP) institutionalized in 2016, which sharply focused on Taiwan’s engagement with 18 South and South East Asian countries. Besides this, the ensuing China-US trade war and escalating costs in China have made the Indian economy more lucrative to Taiwan as the world’s fastest growing emerging economy.

The basic idea of the India opportunity is also present in Taiwan’s New Southbound Policy (NSP), which seeks to expand links with countries across South and Southeast Asia. There have been previous Taiwanese efforts to look beyond this region. However, this time, there’s an emphasis on building economic and people-to-people ties, as well as a greater focus on India.

Incidentally, India has been in step with the ‘One China Policy’, which essentially implies that only one country will represent China. However, over the years, India has shown keenness to expand economic and socio-cultural ties with Taiwan. TAITRA set up four new offices in India in the four metros of Delhi, Kolkata, Mumbai and Chennai.

Beyond the under-the-radar political, defense, and intelligence links that India and Taiwan maintain, there is a need to identify areas where interests are complementary or engage stakeholders, create constituencies, and increase the visibility beyond official circles in Delhi. To some degree, there have been steps taken under the NSP that fit these categories. But there are further opportunities on the table, some that fit under the NSP rubric and some that go beyond it.

The prime focus of the NSP is on increasing economic ties with the 18 targeted countries. Given the number of complementarities, this seems like a no-brainer for Delhi and Taipei—India needs investment and Taiwan is looking to diversify from its traditional targets of investment (particularly China). And over the last few years, investment has increased, with more Taiwanese companies operating in India than the past (e.g., in the smartphone manufacturing sector). For the Indian government, these companies have helped—and could help further—increase manufacturing in India. (Delhi has highlighted Foxconn’s investment as a key indicator of its ‘Make in India’ initiative having had an impact). In certain sectors, Taiwanese firms are also bringing their Indian partners into global value chains. Moreover, Taiwan can add value in areas that India is prioritizing, for example, with its technology and techniques in the ICT, healthcare, agriculture, and food processing sectors, as well as offer opportunities for engagement at the state level. There is also a chance to cooperate in areas where India is concerned about over-dependence on China, such as the solar power sector.

The chambers of commerce should also consider an annual India-Taiwan CEO Forum, or at least regular exchanges between senior business executives. This will help Taiwanese businesses establish direct connections with their Indian counterparts. It could also facilitate cooperation between Indian and Taiwanese companies, not just in India, but potentially in third countries as well. Indian and Japanese companies, facilitated by their governments, are already doing this as they undertake connectivity projects in India’s neighborhood. Delhi needs partners in this regard domestically and in its extended neighborhood, and Taipei—particularly with its strength in the digital space—could bring something to the table.

After the establishment of India center in Taiwan by TAITRA in 2017, some steps can help familiarize Taiwanese companies with the opportunities available in India, as well as assist them as they navigate how to operate in complex country. It would also help if the Taiwan Chamber of Commerce facilitated greater dialogue between those companies already investing in India and those considering the option (to share lessons learned among other issues). Wherever possible, Taiwanese companies should also compare notes with their American, Japanese, Singaporean, or South Korean counterparts, who have had more experience operating in the Indian market (perhaps even via trilateral dialogues facilitated by the respective business chambers). TAITRA should propose to open an office in Bengaluru or Hyderabad, given the potential for cooperation between the two tech regions.

In the past decades, Taiwan has grown significantly in the production of machine tool components including castings, cutters, ball screws, and linear guide ways. Added to this, its comprehensive supply chain is one of its core strengths.

Indian manufacturers in their respective sectors use Taiwanese machinery because of its lower cost, rigid quality, and plentiful services. With technology know-how, Taiwanese manufacturers are skilled at customization and most importantly, they have been responding swiftly to changing market demands.

At Last

For the moment, Taiwan is basking in the glow of international praise. It’s won plaudits for not only stemming infections, but also pledges to ship millions of surgical masks to Europe, the U.S. and its few remaining diplomatic allies around the world that China hasn’t picked off. Taipei has also held virtual seminars with countries such as India and the Philippines.

The countries have realized each other’s significance in their progress. While Taiwan is known for its hardware manufacturing, India’s software industry is famous world-over. It’s about time India explored Taiwan’s potential to contribute in ‘Make in India,’ ‘Digital India’ and ‘Smart Cities’ campaigns, and attain the common goal of success.