Taiwan firms are shifting supply chains to India from mainland China as Taipei and New Delhi strengthen economic ties, the head of the island’s key trade body told Reuters.
James Huang, chairman of the Taiwan External Trade Development Council, said that trade conflicts between the United States and China drove up Taiwan’s foreign direct investment (FDI) in India to more than $665 million in the five years to 2023.
That compared with Taiwan’s FDI of nearly $277 million in India during the decade from 2006 to 2017.
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“It is evident that more Taiwanese companies are moving supply chains out of China and are establishing them in India,” he added.
Like most countries, India has no formal ties with Taiwan, but the two have established a close business relationship, with India keen on more investment from the major chip-producing nation to aid its efforts to boost manufacturing.
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Taiwan is formally known as Republic of China (ROC), and it is independently and democratically governed since the Nationalist Party led by Chiang Kai-Shek lost the civil war against the Communist Party led by Mao Zedong and relocated to the island.
India also has difficult relations with Communist China, particularly over a disputed shared border, that led in 2020 to their deadliest clash in decades.
Taiwan’s Powerchip Semiconductor Manufacturing Corp partnered this year with India’s Tata Group to build the first semiconductor fabrication facility in western Gujarat state, relying on a $10-billion incentive scheme.
“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 said.
Two-way trade between India and Taiwan stood at $10.1 billion during the fiscal year ending in March 2024.
Reuters contributed to this report.
