Recent developments in the Taiwan Strait has prompted strong reactions from stakeholders in the Indo-Pacific region. Although India had deliberately chosen to refrain from making any comment, in August, the Indian High Commission in Sri Lanka referred to the “militarisation of the Taiwan Strait” in response to Chinese accusations of India bullying its southern neighbour, Sri Lanka. This is in stark contrast to the earlier comments made by the official spokesperson of the Indian Ministry of External Affairs (MEA), Arindam Bagchi, and highlights a more definite Indian approach to the situation in the Taiwan Strait. Consequently, this move by New Delhi must be viewed in the context of the changing importance of Taiwan in international power politics.
The evolving geopolitical scenario in the Indo-Pacific region also demands a realignment of foreign policy preferences by the two sides. Seeking answers to the question of reciprocity necessitates understanding India’s relationship with Taiwan in the context of New Delhi’s engagements with Beijing, and Washington, as well as India’s national interests focusing on protecting its sovereignty. To assess the future of India’s Taiwan policy, however, it is important to understand the critical value of reciprocity in building state ties, especially when both actors share tense ties with a common threat. How can New Delhi and Taipei balance reciprocity better?
Evolution of India-Taiwan Ties
Despite the Republic of China (ROC) or Taiwan having its own laws, a distinct democratic political setup and a vibrant economy, it has not received formal diplomatic recognition from most countries, including India. Most of the international community adheres to the People’s Republic of China’s (PRC) claim over Taiwan. The PRC’s insistence on acceptance of the One-China policy is the base requirement for establishing diplomatic relations with Beijing. This policy accepts that the PRC is the only China that exists and that Taiwan is a province of China.
India does not have diplomatic ties with Taiwan and has been generally quiet on issues relating to Taiwan due to the constraint of the One-China policy. During the Cold War era, India-Taiwan relations had been relegated to the back-burner. The Indian foreign policy of non-alignment and the support it extended to PRC’s membership in the United Nations Security Council (UNSC) further estranged Taiwan. It was only in the 1990s with the establishment of unofficial relations between the two countries; the setting up of the India-Taipei Association (ITA) and the Taipei Economic and Cultural Center (TECC) in 1995 and Taiwanese investment entering India, that Taiwan was seen to be factored into India’s Look East Policy (LEP), although this has also been largely constrained by Cross-Strait relations.
Despite diplomacy being largely absent in relations between India and Taiwan, the bilateral has periodically witnessed visits by political leaders from both sides. Furthermore, New Delhi and Taipei have steadily increased engagement with each other through cooperation in science and technology, education, and cultural exchanges. The two countries have signed multiple agreements, MoUs on economic cooperation in the areas of trade, investment and industry. The volume of bilateral trade increased from US$ 0.93 billion in 1995 to US$ 5.65 billion in 2020. Taiwanese investment in India has also amounted to over $2.3 billion and more than 120 Taiwanese companies have invested in India till date.
Despite being complementary economies, according to Baushuan Ger, Taiwan’s Envoy to India, current bilateral trade arrangements are not enough in the post-pandemic era. India’s ties with Taiwan when compared to India’s relations with its other Asian neighbours showcase the overall slow and sporadic progress of Taiwan-India relations. Furthermore, comparing Taiwan’s engagements with that of countries such as the US and Japan highlights the lack of depth in actual cooperation in the India-Taiwan bilateral. For instance, in 2020, Taiwan’s FDI in the US was $13.7 billion in 2020 and US FDI in Taiwan was $31.5 billion.
Geopolitical Considerations in India-Taiwan Ties
The underdeveloped relationship between India and Taiwan can be attributed to both India’s cautious stance toward Taiwan and the lack of substantive support on Taiwan’s part towards India. Moreover, cross-strait relations pose a challenge for states such as India, which adheres to the One China Policy. India’s adherence to the ‘One China Policy’ and Taiwan’s claims on behalf of the ROC of Aksai Chin and Arunachal Pradesh — a state of India — as part of its own sovereign territory makes it difficult for either country to support the other in its disputes with mainland China.
Back in 2016, when Tsai Ing-wen was elected as Taiwan’s president, Beijing had suspended all official channels of communication with Tsai’s government, given that Tsai refused to accept the 1992 Consensus in its totality. It was observed that Taipei was attempting to distance itself from economically depending on the mainland and was looking to diversify its trading and investment channels. Beijing is cautious of Taiwanese President Tsai Ing-wen’s Democratic Progressive Party (DPP), an independence-leaning, nationalist party, and critical of Tsai’s “New Southbound Policy” (NSP), under which India has since long been regarded as a key partner.
Beijing is also concerned about Taiwan’s growing engagement with India, perceiving Taiwan-India ties from the lens of the Kautilyan maxim “enemy’s enemy is a friend”. In spite of no formal relations between the two countries, the ruling Bhartiya Janata Party’s (BJP) affiliated organisations have attempted to exert their influence on matters beyond the ideological and cultural realms and into political matters by championing greater engagement with Taipei. For instance, two BJP MPs virtually attended the swearing-in of Tsai Ing-wen for her second term. Shiv Kumar Nebhwani, a Vishva Hindu Parishad (VHP) Taiwan committee member urged India to follow the lead of the US and develop back-door channels for greater engagement in Taiwan.
India’s long-established political neglect of Taiwan must be replaced with a more self-sustaining relationship which can build better conditions to facilitate cooperation. Therefore, at this juncture, India-Taiwan ties are still riddled with ambiguity, as it is unclear where both fall under their respective foreign policy formulations. Nonetheless, it can be argued that India and Taiwan can upgrade the scope of their bilateral — without affecting their individual relationships with China — by building a more pragmatic relationship.
Addressing the Reciprocity Gap
As a counter to Beijing’s hegemonic and expansionist assertiveness in the region, Washington has attempted to reinforce its commitment to Taiwan. This was highlighted in US Speaker Nancy Pelosi’s visit to Taiwan, which was followed by another US Congressional delegation’s visit to the island country. In response to these developments, New Delhi issued a statement urging the “exercise of restraint, avoidance of unilateral actions to change the status quo, de-escalation of tensions, and efforts to maintain peace and stability in the region.” He added that India’s policies “do not require reiteration” as they remain unchanged.
Cooperation with Taiwan makes “strategic sense” for India, given that Taipei knows Beijing best. On the other hand, India has several self-imposed constraints on its Taiwan policy which must be addressed. According to Jabin T. Jacob, if Taiwan wishes to receive support from India in the international arena, it needs to factor in investment in academic scholarships to India which have remained largely undervalued. The same can be said for people-to-people exchanges, and other issues relating to economics and politics. For its part, India must pay heed to the strategic significance of Taiwan by extending cooperation in civilian, economic and technology matters and positioning Taiwan more firmly in its Act Eat Policy if it intends to secure its standing in East Asia.
Both India and Taiwan are similar in the sense that they share democratic values, have converging security and strategic concerns in the Indo-Pacific and have tense relations with the PRC. Even though India and Taiwan do not have formal diplomatic ties, they can capitalise on the evolving Indo-Pacific environment to improve their bilateral, regional and multilateral relations. As such, New Delhi and Taipei should pursue foreign policy priorities, extending cooperation beyond mere economics. Despite the huge scope of burgeoning economic and trade ties, actual Taiwanese investment in India is disappointing. A lot of factors come into play which hampers boosting Indian-Taiwanese economic linkages, such as insufficient understanding of domestic markets, corruption, tax regulations, and linguistic and cultural barriers. Furthermore, the lack of formal linkages has also restricted ministry-level agreements and educational exchanges, leaving the potential of India-Taiwan ties unrealised and dormant.
New Delhi and Taipei need to complement their efforts in trade, investment, science and technology with deepening bilateral relations in education, tourism, talent cultivation as well as people-to-people exchanges. In extension, both Taiwan and India must identify the similarities in their respective New Southbound and Act East policies and establish greater engagement with each other. India and Taiwan have much to gain by extending their cooperation in areas of mutual interest in the regional Indo-Pacific architecture. These include upholding the international rules-based order, bolstering their standing on international platforms as well as maintaining regional maritime security. The geo-economic environment also affords New Delhi and Taipei to think along the lines of establishing cooperation in regional economic and trade mechanisms. In December 2021, the two countries began negotiations for a free trade agreement (FTA), intending to build India into a semiconductor manufacturing hub. Taiwanese companies like Pegatron which usually offshore their manufacturing to China, have announced looking into setting up their first plant in India. This can be viewed in the context of rebalancing Taiwan’s economic linkages with the PRC.
In addition, since 2018, owing to anxieties of over-reliance on mainland China’s high-tech manufacturing, the onset of the COVID-19 pandemic and signs of US-China decoupling, Taiwan has sought alternative supply chains outside China. To avoid Chinese economic coercion, market access between India and Taiwan must increase to facilitate deeper reciprocity in India-Taiwan engagements. India’s huge domestic market and cheap accessible labour are huge attractions for Taiwan. Furthermore, diversifying India’s supply chains would lessen its own dependence on Chinese imports, especially in the face of tense border disagreements with mainland China.
Keeping in mind the intense geopolitical and strategic shifts in the region brought about by recent developments in the Taiwan Strait, India must develop strategic clarity in its dealings with Taiwan while aiming for a self-sustaining relationship. It is noted that while bilateral relations will never move past the China factor in the strategic domain, a convergence of the Taiwanese New Southbound Policy and Indian Act East Policy can deepen India-Taiwan ties. Nevertheless, it remains to be seen how India and Taiwan will manoeuvre geopolitical risks in the region to further bilateral relations between each other.
