Taiwan is eyeing a 20% y-o-y growth in trade with India in the backdrop of the New Southbound Policy (NSP) institutionalised in 2016, which sharply focused on Taiwan’s engagement with 18 South and SouthEast 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.
Speaking on the sidelines of the Taiwan Expo 2019 organised in the capital by the Bureau of Foreign Trade (MOEA) and Taiwan External Trade Development Council (TAITRA), Walter Yeh, President & CEO, TAITRA said that there is big scope for trade to expand between India and Taiwan. “There is no limit to the growth potential. The current trade volume between India and Taiwan is to the tune of $7 billion. There is a lot of market to scale up further. Taiwan’s trade with China alone is 160 billion,” he said.
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 last year, in the four metros of Delhi, Kolkata, Mumbai and Chennai.
In fact, in the last two years, interest from the island nation in India has grown substantially. A spate of Taiwanese investments came by in India in the last one year alone, with investment figures spiralling to $360 million by Taiwanese companies. Notable among these have been Taiwanese contract manufacturer companies such as Wistron and Foxconn which planned to invest Rs 7,500 crore in India over a five year period.
This is a swift shift from the previous dynamics in investment inflows. A major part of the change can be attributed to the NSP which warranted that Taiwan reach out to more investment and trading partners and reduce its dependence on mainland China. “In the last 10 years, the cumulative investment by companies from Taiwan in India was $700 million. However investment grew a lot in the last year. We started late in India, but want to grow now. We are inviting more Indians to Taiwan and this year we also have a big delegation attending the summit in Gujarat,” adds Yeh.
Such statistics, however, still fall short when seen in the context of China’s investment in the country. For instance, data by research and analytics firm Tracxn revealed that China’s Venture Capital (VC) investment in Indian startups alone has grew leaps and bounds, scaling up to $5.6 billion in 2018 compared to $668 million in 2016. Alibaba, Shunwei Capital and Xiaomi were some of the top investors in the space even though relations between India and China haven’t exactly been smooth.
Andrea T J Hsu, Deputy Director General, Hsinchu Science Park Bureau reasons that the relatively lower numbers in the case of Taiwan is due to its reliance on the mainland China market in the past. But that is set to change now. “China’s trade war with the US has an impact on Taiwanese companies too, so the need to find other partner countries has increased. Moreover Chinese people are excellent manufacturers but don’t have the sense of art, creativity, design and imagination that is found in India. The Indian market is a top priority for us.”
Hsu is optimistic that it can be a win-win collaboration for India and Taiwan with the complementary advantages that the two nations have to offer each other. “India has a very good talent pool, technology and creativity which Taiwan lacks. Taiwan, on its part, has high tech competence that India demands. More than 80% of the chips come from Taiwan. It can be a highly beneficial partnership. It will enhance the bilateral trade,” she added.
Currently, some of the top Indian exports to Taiwan comprise mineral fuels, oil seeds, maize, iron and steel and organic chemicals, while imports from Taiwan are electrical machinery and equipment, plastics, machine tools and organic chemicals.
The Taiwan Expo saw around 150 exhibitors participating with medical equipment, smart living solutions, green products, tourism, agriculture and bubble tea making up some of the keenly visited pavilions. It saw an enthusiastic turnout with 40,000 visitors attending the expo in the first two days itself.
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