From UPSC perspective, the following things are important :
Prelims level : Nothing Much
Mains level : Stronger relationship with Taiwan may boost India's Act East policy
Some in Delhi, however, would say that Modi’s focus on Taiwan is too big and risky an idea. They worry it might offend Chinese political sensitivities. But productive engagement with Taiwan is not about abandoning India’s “One-China” policy or playing some kind of a “card”. India has been rather scrupulous in respecting China’s sovereignty and territorial integrity.
Relationship with Taiwan
- Most major nations have significant cooperation with Taiwan without extending it diplomatic recognition. India, however, has too many self-imposed constraints on its Taiwan policy.
- It is now time to lift many of them.
- To be sure, since the establishment of formal channels of contact in the mid-1990s, there has been steady progress in the relationship.
- Annual bilateral trade has reached $7 billion last year and the hope is to raise it to $20 billion in the next few years.
- There has been a rise in Taiwan’s investments in India and a steady growth in exchanges between the two societies.
- During the last five years, the NDA government has taken steps to enhance the relationship.
- These include the upgradation of the bilateral investment agreement, promotion of major Taiwanese investments, expanding parliamentary exchanges and facilitating track-two dialogues on regional issues.
Reasons to enhance the relationship
There are at least three reasons why Delhi should take a fresh look at Taiwan and replace its current incrementalism with a more ambitious policy.
- Geopolitical –
- The delicate three-way political compromise between US, China and Taiwan crafted in the 1970s appears to be breaking down, thanks to rising China’s regional assertiveness, the renewed threat of forceful reunification of Taiwan and Beijing’s relentless pressure tactics against Taipei.
- If there is one piece of real estate that holds the key to the geopolitics of East Asia, it is Taiwan. The unfolding dynamic around Taiwan will have significant consequences for India’s Act East Policy and its emerging role in the Indo-Pacific Region.
2. Geo-economic –
- The unfolding trade war between the US and China is compelling Taiwan to accelerate its plans to move its large manufacturing bases away from China to Southeast Asia and India.
- As the structure of industrial production in East Asia undergoes a profound transformation, amidst the prospect of an economic decoupling between the US and China, India has once-in-a-generation opportunity to boost its own manufacturing sector.
3. Talent and technology
- As it turns out, Taiwan has embarked on a big mission to attract skilled workers.
- With a declining birth rate and growing emigration, Taiwan’s industry, education, and technology development could do with Indian engineers and scientists. At present, there are barely 2,000 Indians working in Taiwan.
Future of relationship
- There is no shortage of ideas for the transformation of India’s relations with Taiwan.
- An agreement on comprehensive economic cooperation is one of those.
- The synergy in human resources provides the basis for massive collaborations between the universities, research institutions and technology enclaves in the two countries.
- Expanding the engagement with Taiwan can’t be a tactical game; it should be an important part of Delhi’s effort to come to terms with all corners of Greater China that looms so large over India’s future.
Those who think Taiwan is small beer in the wider scheme of Indian grand strategy should ponder over two facts. Taiwan’s GDP is about $600 billion and twice the size of Pakistan’s economy. And few entities in the international system are today as eager and capable of boosting Modi’s domestic economic agenda.