India-Taiwan Relations: What is the Way Forward?

Sumit Kumar Jha

The Modi government took many foreign policy initiatives to deepen India’s ties with the rest of the world soon after coming to power. One was to foster closer ties with the East Asian countries under its Act East policy. However in May 2016, after the completion of two years of the government, no serious efforts have been made to improve ties with Taiwan, which can play a vital role in India’s strategic and economic interests in East Asia. In the January 2016 elections, Tsai Ing-wen of the Democratic Progressive Party (DPP) was elected as the President of Taiwan, and she has announced her intention to prioritise relations with India.

 

Overview of Bilateral Relations

Post-independence, the bilateral ties between India and Taiwan ceased to exist when in 1950 India accorded diplomatic recognition to the People’s Republic of China (PRC). Further, during the Cold War, the prospect of having even informal ties between New Delhi and Taipei remained remote, as Taiwan joined the US-led block and India the non-aligned movement.

 

This changed in the 1990s when the Narsimha Rao Government reoriented India’s policy towards Taiwan in the face of India’s domestic and foreign policy challenges. Domestically, India had to deal with one of its worst economic crises. Externally, India needed to adapt to a new international order, where its time-tested friend, the Soviet Union, was no longer available to provide it financial and defence cover. Consequently, India and Taiwan set up unofficial relations in 1995 with the establishment of the India-Taipei Association (ITA) in Taipei. The two countries signed the Double Taxation Avoidance Agreement and the Customs Cooperation Agreement in 2011. These initiatives have increased trade between the two countries from US$1.2 Billion in 2000 to US$5.9 billion in 2014. In August 2015, Taiwan-based Foxconn, one of the largest hardware manufacturers in the world, announced an investment of US$5 billion in India. The two countries are also cooperating in the field of science, technology and culture; Taiwan provides teachers for several Chinese courses in India. Despite India and Taiwan having common reasons to accelerate their bilateral ties, the size of the relationship remains small.

 

The Way Forward

Strategically, both the countries have security threats from China. India has a long-standing territorial dispute with China and in fact, in recent times, Beijing has increased its assertive posturing on Indian territory. On the other hand, experts have opined that Beijing can use military power to annex Taiwan if their “one-China policy” comes under threat, considering it a breakaway from mainland China. Additionally, New Delhi and Taipei share the common interest of preventing China from making South China Sea its exclusive zone. Through this, Taiwan can further consolidate its identity as an independent state and India can ensure freedom of navigation in the South China Sea through which 50 per cent of its trade takes place. India can further expand its oil and gas exploration activities in the region.

 

Taiwan has a better understanding of China’s strategic depth because of their close geo-strategic proximity and linguistic and cultural ties. A closer relationship with Taipei will help New Delhi understand Beijing’s strategic thinking. While the Modi government has given special attention to developing triangular and quadrilateral coalitions with the US, Japan and Australia as part of its regional security strategy, and the inclusion of Taiwan can prove to be crucial in this endeavour.

 

Delhi can advance its economic interests by working with Taipei. The latter possesses huge foreign reserves and is known for its expertise in the field of hardware manufacture, construction, mines exploration, electronics, and automobiles, among others. Thus, it can undoubtedly play a critical role in the success of the current government’s Make in India, Digital India, and Skill India initiatives. A case in point being a possible collaboration between India’s expertise in software and Taiwan’s in hardware. Additionally, by providing a market of its size to Taiwan, India would be able to address the deepening economic ties between China and Taiwan.

 

Soft diplomacy has been given primacy in the current government’s foreign policy. In this, religious tourism has great potential, considering Buddhism is the majority religion and India is its birth place.

 

While it is true that one major obstacle that hampers close ties between India and Taiwan is India’s acceptance of the “one China policy”, this, should not deter New Delhi from seeking close security and economic ties with Taipei in the same way as Beijing is expanding its involvement with Islamabad in Pakistan-occupied Kashmir (PoK). India should take bold initiatives to reach out to Taiwan and it should also assert its right to decide what type of relations it wishes to have with Taiwan. It would be interesting to see how the DPP government and India sustain and expand their bilateral ties, with China in their backyard.