TAICHUNG (Taiwan News) — Probably the first time Indians had much cause to think about Taiwan was because of Indian National Army leader Subhas Chandra Bose, who was either a heroic anti-imperialist fighter for independence from the British Empire or a hated puppet of the Japanese Empire and the Nazis, depending on who you ask.
Three days after the Japanese emperor announced surrender in World War 2, his plane may, or may not, have crashed in Japanese colonial Taiwan, also depending on who you ask. Fortunately, no one seems to be blaming the Taiwanese for any of this.
After the Kuomintang (KMT) lost the Chinese Civil War and scampered off to Taiwan, India formally shifted diplomatic relations to the People’s Republic of China (PRC) in 1950. During the first and second Taiwan Strait crises in 1954-55 and 1958 then Indian Prime Minister Jawaharlal Nehru, concerned about the conflict widening, tried to play peacemaker between the U.S. and China, but failed both times. In both crises, the Americans feared India was too close to China and the Soviet Union to be an honest broker and in the second crisis, the PRC thought the Indians were too close to the Americans.
Taiwan also sent agents to India following the Chinese attack in the early 1960s to assist while simultaneously maintaining that the border claims against India pressed by the PRC were correct as they were the same claims made by the Republic of China (ROC). Agents were also sent, along with the Indians and Americans to assist resistance efforts in Tibet.
The modern era of Taiwan-India relations began in the early 1990s when Taiwan was democratizing and opening up and India was opening up its economy to the world. In 1993, the two sides agreed to establish representation in each other’s capitals, namely the India-Taipei Association for India in Taipei officially opened in 1995 and the Taipei Economic and Cultural Center in New Delhi and later Chennai, India. A third office will soon be opened in Mumbai.
Despite a lot of talk of cooperation and mutual business opportunities, for a long time, progress was fairly slow. A bilateral trade agreement and double taxation deal were agreed upon in the early 2000s, but trade only continued to grow slowly as Taiwan was primarily focused on investing in China and India was eyeing bigger markets.
Some Taiwanese manufacturers did start to set up shop in India, but progress was slow and plagued with problems as Taiwanese managers struggled to adapt to Indian conditions. In more than one case, workers rioted.
Big advancements in Tsai era
Relations have been accelerating in recent years. The newly-elected Tsai Ing-wen (蔡英文) administration launched the New Southbound Policy (NSP) to improve both diplomatic and economic ties with 18 countries, including India, to reduce reliance on the Chinese market and build stronger ties between Taiwanese and the people of those nations. This aligned nicely with Indian Prime Minister Narendra Modi’s Act East policy, though so far neither side has been actively coordinating with the other, which is a shame.
Other factors have worked to push the two sides closer. The U.S.-China trade war, increasing restrictions on technology exports to China imposed by the Americans, recent supply chain problems, declining demographics and rising labor costs in China, a growing desire by companies like Apple to diversify supply chains, and a push by democratic countries to “friend-shore” business have all contributed toward major growth in Taiwanese firms moving manufacturing to India. Recent border clashes initiated by China against India have also been a factor in moving India closer to Taiwan.
It is estimated that one-quarter of Apple’s iPhones will be assembled in India in 2025, mostly by Taiwanese firms. Companies like Foxconn, Gogoro, Asus, and TECO among many others are investing in India, and the official figures are likely understated because many Taiwanese companies invest via third countries.
Some of these companies are taking advantage of support offered by the Indian government, including subsidies for electric vehicles and especially semiconductor manufacturers. India has also set up a “one-stop shop” targeting Taiwanese investors called Taiwan Plus. An updated bilateral trade agreement was also signed in 2018.
Like China, India can provide vast numbers of well-educated, hard-working, and diligent employees at lower wage points. It also now boasts a massive domestic market.
On the other hand, it will take time to recreate the extensive supply chains that China has built out over the years. India can also be hard to navigate, with hundreds of local languages, cultures, religious practices, as well as complicated bureaucracy and tax requirements that vary from state to state. Outside of industrial parks, water and stable electricity can be a problem.
Over time, however, these problems will likely work themselves out as supply lines expand and more infrastructure is built. A large class of Taiwanese experienced in Indian practices will form, which will in turn make it easier for yet more Taiwanese firms to invest.
Progress on cultural, academic, and people-to-people ties has also been happening during the Tsai era. Indian students in Taiwan now number around 3000, think tanks are forming partnerships and more Taiwanese are moving to India to teach Mandarin. I had the honor to deliver a lecture to India’s first-ever Taiwan studies program.
Just this week, Taiwan and India signed an MOU to bring Indian laborers to Taiwan.
The Indian government has been mapping out contingency planning for a Chinese attack on Taiwan. They recently sent a military delegation to Taiwan that included current officers and the retired heads of three service branches of the Indian armed forces.
Curious quirk in relationship
The most masterful and comprehensive work on which countries around the world follow various "one China" policies or principles and what they mean was compiled by Ja-Ian Chong for Carnegie, and is a must-read for anyone unfamiliar with the subject. Yet, despite the extensiveness of the list, India is not on it.
Broadly speaking the "one China Principle" is China’s formulation which unambiguously says Taiwan is part of China’s territory, period. Those who follow a "one China Policy" do not outright state that Taiwan is part of China, but rather "acknowledge" or "take note of" China’s position on the matter, without endorsing it.
When India established ties with the PRC, it promised to cut ties with the ROC and to back the PRC in the U.N., but that was all on the subject. Quite possibly, being less than one year old and with few formal diplomatic ties, Chinese diplomats at the time may not have yet come up with anything specific on the subject.
The first time "one China" comes up is in 1996 and reads: “The Indian side recalls that India was among the first countries to recognize that there is one China and that its one China policy has remained unaltered. The Indian side states that it will continue to abide by its one China policy.”
That India had only just opened its representative office in Taipei the year earlier may account for this first appearance.
The last time it made an appearance is most likely in 2008, and reads: “The Indian side recalls that India was among the first countries to recognize that there is one China and that its one China policy has remained unaltered. The Indian side states that it would continue to abide by its one China policy, and oppose any activity that is against the one China principle. The Chinese side expresses its appreciation for the Indian position.”
Then India stopped using it, and when pressed on the matter by China routinely replies with something like this: “India’s relevant policies are well known and consistent. They do not require reiteration.” In 2014, India’s external affairs minister made it clear why they have dropped ‘one China’ by saying “for India to agree to a one-China policy, China should reaffirm a one-India policy.”
It is unclear now if India has a "one China" policy any longer. If they do we do not know what it is, because they have never explicitly stated their "one China" formula as other nations have done. Like the Subhas Chandra Bose plane crash, it may depend on who you ask.
Going forward
Some nationalists in India have called for a more robust relationship with Taiwan or even extending diplomatic recognition, often connected with putting pressure on the PRC. That is unlikely to happen.
Speaking with Indian friends and scholars, all of them said the same thing. India will continue to take small steps in improving the relationship with Taiwan, but will not take any big or dramatic ones.
China and India have fought a war and had many skirmishes over their disputed territorial claims. India has to manage that relationship carefully, and that takes precedence over Taiwan.
There were newspaper reports that a full-fledged free trade agreement was being negotiated, but those reports turned out to be false.
Taiwan and India are complementary in many ways. Common examples given are that Taiwan is a powerhouse in hardware, medical devices, and systems but has a talent shortage due to demography, while India is a powerhouse in software and medicine and has a talent surplus.
The potential for the two countries to cooperate and become “a defining relationship in the Indo-Pacific” is certainly there. If a few elements can be handled well, I think there is the possibility that the relationship will boom, producing massive economic and cultural growth in both nations.
