India’s beef with China may see it turning to Taiwan for trade

China which claims Taiwan a part of its territory, doesn’t recognize it as a country and has been pressuring India not to strike any trade deals with it for the past many years

The Narendra Modi government which is vying for investment worth ₹10.5 trillion for smartphone production gave approval to two Taiwanese firms earlier this month. Photo for representational purpose only: iStock

India’s strained relations with China may soon see it forging trade ties with Taiwan, a self-governing island country which China claims as its own.

A Bloomberg report, quoting officials, said there has been growing chorus among industrialists in India to initiate trade talks with Taiwan, especially when India’s trade relations with China have suffered due to the border standoff at Ladakh.

Although Taiwan had been keen on trading with India for the past many years, the Centre has been wary to make a move, fearing a backlash from China once any such pact is registered with the World Trade Organisation, a senior government official told Bloomberg.

The official, however, didn’t reveal whether any decision has been taken to begin talks in this regard.

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A trade deal with Taiwan would help India with more investments in the technology and electronics sectors. Taiwan, on the other hand, would benefit out of any such talks as it has been unable to begin trade negotiations with major economies due to pressure from China.

India, as per its diplomatic commitment to China, doesn’t formally recognize Taiwan.

The Narendra Modi government which is vying for investment worth ₹10.5 trillion for smartphone production, earlier this month approved Taiwanese firms including Foxconn Technology Group, Wistron Corp. and Pegatron Corp.

In 2018, India and Taiwan signed an updated bilateral investment agreement to expand their economic ties. According to the Department of Commerce the commerce between both the economies grew by 18 per cent to $7.2 billion in 2019.

Commerce Ministry spokesperson Yogesh Baweja and Taiwan’s top trade negotiator John Deng, however, didn’t respond to Bloomberg’s queries in this regard.

Taiwan’s emergence in the Indian trade scene comes amid deteriorating India-China relations following the Ladakh standoff. Following the death of 20 Indian soldiers due to a clash with Chinese troops in Galwan Valley of eastern Ladakh, the Centre banned more than a dozen apps including TikTok.

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Taiwan’s effective handling of the coronavirus situation is also turning public opinion in favour of President Tsai Ing-wen’s administration.

Recently, China faced heavy public outrage from angry Indians, especially on Twitter, when it asked Indian media outlets not to call Taiwan a country when reporting on its October 10 National Day celebrations.

Indian Twitteratti on the other hand praised Taiwan, while making the hashtag #TaiwanNationalDay go viral.


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