Impact of China Tensions: Taiwan Businesses Explore Indian Supply Routes

July 16, Taipei is on the move to shift its leftover businesses from its bitterest enemy The Public Republican of China, as global trade tensions build among major countries, Taiwan enterprises are transferring their supply chains from China to India, as Taipei and New Delhi expand their economic connections, according to the chairman of the island’s main trade association, who spoke to Reuters.

Geopolitics in the Indo-Pacific region have been especially turbulent for years due to China’s territorial claims over Taiwan, which Taipei has consistently denied.

In a military drill held by Beijing, warplanes were seen flying over an island close to the Taiwanese camp. The aircraft later joined the Type 002 class Shandong aircraft carrier, a variant of the Kuznetsov-class carrier, in the Pacific.

Using this signal, China has scared off its enemies and neighbours as Shandong moves to the Pacific Ocean for a military drill while moving near the Philippines.

To know more about this, follow this link- Taiwan’s Hourglass: China Tightens the Sands of Geopolitical Time | News India Official

This last incident has worked as a catalyst in the Taiwanese trade relocation from China to India, according to James Huang, head of the Taiwan External Trade Development Council, the trade spat between the US and China increased Taiwan’s foreign direct investment (FDI) in India to more than $665 million in the five years leading up to 2023.

That compared with democratically ruled Taiwan’s FDI of nearly $277 million in India from 2006 to 2017, Huang said in an interview on Monday, “It is evident that more Taiwanese companies are moving supply chains out of China and are establishing them in India,” he added.

India and Taiwan have a mutually advantageous partnership that has been growing quickly. India wants to enter the semiconductor industry, while Taiwan wants a strong business partner in the region.

Following the eastern Ladakh border row with China, the Indian government has been pushing for upgrading New Delhi’s ties with Taipei, especially in the trade and investment sectors.

To know more about The Indo-China clash, follow this link- India-China clash: 20 Indian troops killed in Ladakh fighting (bbc.com)

Using a $10 billion incentive program, Taiwan’s Powerchip Semiconductor Manufacturing Corp. opened a new tab this year and collaborated with India’s Tata Group to construct the first semiconductor fabrication facility in the western state of Gujarat.

“We have programs to bring in Indian students and talents to be trained in Taiwan in semiconductors and that would pave the path for our future cooperation,” Huang stated.

According to him, Taiwan’s move in the supply chain has concentrated on the footwear and mobile phone assembly sectors. The value of two-way trade between Taiwan and India in the fiscal year that ended in March 2024 was $10.1 billion.

Taiwanese companies are growing their factories in collaboration with India, a strong and reliable partner eager to get more know-how in the semiconductor industry to bolster its manufacturing efforts and Taiwan is willing to assist this expanding alliance.

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Mohammad Kaif ZaidiNews Writer

Mohammad Kaif Zaidi is a student of MA Mass Communication and Journalism at Aligarh Muslim University. His background is strongly backed by his previous experience in the vibrant spectrum of mass communication and journalism. He possesses a creative and technical personality with a robust approach towards his work.

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