India Emerges As Key Destination For Taiwanese Tech Giants Seeking To Diversify Supply Chains Amid China Tensions

Leading technology companies in Taiwan are considering relocating their manufacturing bases to India in order to reduce their dependence on the Chinese market.

This move comes as tensions between Taiwan and China continue to escalate, according to top policymakers in the Taiwan government.

There is significant potential for collaboration between New Delhi and Taipei, particularly in the areas of emerging technologies and critical technologies such as semiconductor manufacturing and electronics equipment production, according to Kao Shien-Quey, the Deputy Minister for Taiwan's National Development.

During a discussion with a group of international journalists, Kao Shien-Quey revealed that major Taiwanese technology giants are actively considering India as a strategic destination to strengthen their global supply chains.

Leading Taiwanese companies are considering moving their production bases out of China due to the trade dispute between the US and China, as well as China's increasing military activities near Taiwan. They are looking at countries in Europe, North America, the US, and India as potential relocation options.

The relationship between China and Taiwan has become more strained since US House Speaker Nancy Pelosi visited Taiwan in August of last year.

India is interested in attracting leading Taiwanese chip producers, such as Taiwan Semiconductor Manufacturing Corporation (TSMC), which is the world's largest chipmaker and has clients like Apple. India hopes to establish production facilities for these companies.

A significant number of Taiwanese companies are planning to establish production bases at two exclusive industrial parks in India. These parks are specifically designed for leading industries from Taiwan.

According to an official, discussions are in the final stages for a Taiwanese semiconductor company to establish a manufacturing facility in India. The official requested anonymity.

Taiwan is a major producer of semiconductors, manufacturing nearly 70 per cent of the world's supply. They also produce over 90 per cent of the most advanced chips used in various electronic equipment such as smartphones, car components, data centres, fighter jets, and AI technologies.

In efforts to expand the trade basket, the Taiwanese government has been engaged in negotiations with India for a trade deal.

Taiwan-based Foxconn, Apple's largest supplier, has an iPhone manufacturing facility in Tamil Nadu. This facility has been operational for some time now.

In addition to their existing facility, Foxconn is also setting up another iPhone production facility in Karnataka. This new facility is expected to start production by April next year, further expanding its manufacturing capabilities.

Nearly five years ago, New Delhi and Taipei signed a significant bilateral investment pact. This agreement aims to protect Taiwanese investment in India, fostering a strong economic relationship between the two countries.

Over the years, the bilateral trade between India and Taiwan has been on the rise. Starting at $2 billion in 2006, the volume of trade has steadily increased, reaching $8.9 billion in 2021. This upward trend highlights the growing economic ties between the two nations.

China views Taiwan as a breakaway province and insists on its unification with the mainland, even by force if necessary. In contrast, Taiwan sees itself as a distinct entity separate from China.

While India does not have formal diplomatic ties with Taiwan, both countries maintain trade and people-to-people relations.

In light of the border dispute with China in eastern Ladakh, some experts in India have been advocating for stronger ties with Taipei, particularly in the areas of trade and investment.