China has recently raised objections to any official exchanges between India and Taiwan. This comes following reports suggesting that India and Taiwan are contemplating initiating discussions on a trade agreement, a move China opposes due to its ‘One-China principle’.
Chinese Concerns
The ‘One-China principle’ is recognised by the international community, including India, according to China. Beijing has voiced its disapproval of recent campaigns in India that wished Taiwan a “Happy National Day” (October 10) and referred to it as a “country” or “nation”. Adding fuel to the fire, China also objects to Australia’s inclusion in the Malabar naval exercise with India, Japan and the United States.
India-Taiwan Relations
Formal diplomatic relations between India and Taiwan are non-extant, and their areas of cooperation have been limited due to the lack of political ties. Despite this, bilateral trade turnover has grown exponentially from $934 million in 1995 to $5.91 billion in 2014. The technology sector has seen over thirty collaborative government-funded research projects. In 2015, Taiwanese hardware manufacturing giant Foxconn declared an investment of $5 billion in India, marking a significant development in trade relations. Furthermore, in 2018, a bilateral investment agreement was signed between India and Taiwan.
Taiwan’s Contributions to India
Taiwanese firms are key investors in the Indian market, standing out as a global leader in high-tech hardware manufacturing. Their expertise can significantly contribute to India’s ‘Make in India’, ‘Digital India’ and ‘Smart Cities’ initiatives. Taiwan can also assist in improving India’s agricultural sector with its advanced agro-technology and food processing technology. After signing a mutual degree recognition agreement in higher education in 2010, both sides have expanded educational exchanges.
Challenges to India-Taiwan Relations
Although there is potential for growth, the One-China policy hinders the further development of India’s bilateral relationship with Taiwan. With only around 16 countries acknowledging Taiwan as an independent state, India is not one of them. There are limitations in trade and investment as well, with Taiwan’s share of trade with India constituting a mere 1% of its global trade.
About Taiwan
Taiwan, or the Republic of China (ROC), is an independent island situated off the southern coast of China. It has been governing itself separately from mainland China since 1949. Taiwan is home to twenty-three million people and is the most populous state that isn’t a member of the United Nations. Despite this, it is Asia’s 5th largest economy, boasting prowess in chip manufacture and IT hardware manufacturing.
China’s Claim over Taiwan
The People’s Republic of China (PRC) considers Taiwan as one of its provinces, while prominent political figures in Taiwan express divergent views on the island’s status and its relations with the mainland. Although the bond between China and Taiwan has improved over the last seven years, it remains tenuous.
Way Forward
Considering Taiwan’s significant investments in China studies, India should leverage this opportunity. India possesses rich natural resources, such as bamboo, and could benefit from Taiwan’s advanced bamboo charcoal technology. Such a collaboration would enable India to utilize its resources more efficiently to produce high value-added goods. By appointing a senior diplomat as the new envoy to Taiwan, India indicates a shift in its One-China policy and displays its intention to enhance diplomatic relations with Taiwan.