India-Taiwan Free Trade Agreement Would Benefit Indo-Pacific Region: Taiwanese Official

James Huang, the Chairman of Taiwan External Trade Development Council (TAITRA). (Picture courtesy TAITRA)

NEW DELHI—India and Taiwan in an effort to strengthen and expand their bilateral economic engagement are eyeing a free trade agreement, and looking at setting up a semiconductor manufacturing hub in an Indian city.

James C. F. Huang, chairman of the Taiwan External Trade Development Council (TAITRA) and the first director of Taiwan’s New Southbound Policy Office established under President Tsai Ing-wen, told The Epoch Times in an exclusive interview of the importance of an India and Taiwan partnership in securing stability for the Indo-Pacific region.

“In the larger scope of the Indo Pacific strategy, like-minded partners such as Taiwan and India working closer together will only bring about greater peace, stability, and prosperity for the entire region,” said Huang in an email.

India was earlier reluctant to enter into free trade negotiations with Taiwan over fears that it would anger the Chinese regime. However, after a bloody conflict between India and China in the Himalayan border region in 2020, and subsequent military build-up on the border, India-China relations started deteriorating, which in turn gave a warming of India-Taiwan ties.

Amid the backdrop of free trade agreement (FTA) discussions, the State Bank of India in January raised $300 million from the Taiwanese market and the issuance drew a wide range of investors, according to the Taipei Times.

Huang, who was Taiwan’s Foreign Minister from 2006 to 2008, said India is a major partner of Taiwan’s New Southbound policy, introduced by President Tsai in 2016 to bolster the island’s ties in the Indo-Pacific region.

“The policy aims to leverage Taiwan’s cultural, educational, technological, agricultural, and economic assets to enhance Taiwan’s regional integration and promote the broader development of the Indo-Pacific region,” Washington-based think tank Center for Strategic and International Studies said in a report.

Huang said India, the world’s fifth-largest economy, is a “pillar” of the island’s Indo-Pacific strategy.

“In all of these roles, India wields great power and carries an even greater amount of responsibility. India is a leading democracy and a force for good, and the world is a better place because of it. I firmly believe in the immense opportunity and future of Taiwan-India partnerships, especially in the post-pandemic digital age,” said Huang.

India and Taiwan are “compatible and complementary” partners in the area of information and technology, according to Huang.

“Our ties in terms of trade and commerce have always been among the best relationships we have. Certainly, inking a more comprehensive trade pact would bring about greater benefits for both sides,” said Huang, adding that efforts to accelerate talks on strengthening formal partnerships are always welcome.

TAITRA has been working with the Indian federal government under the Invest India agency program to set up “Taiwan Desks” in various Indian cities to facilitate investment by Taiwanese companies.

“The major investments made by Taiwanese companies are currently located in Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu, Telangana, Uttar Pradesh, Haryana, and New Delhi. We would very much like to see more of such investment, and we hope to gain as much support as possible from the local governments to launch localized services like the Taiwan Desk in their cities,” said Huang.

Visitors look at a screen at the Taiwan stall during the inaugural day of the 3-day Smart Asia 2018 Expo and Summit at the Bangalore International Exhibition Centre in Bangalore on Oct. 4, 2018. IndiaandTaiwanare(Manjunath Kiran/AFP via Getty Images)

Semiconductor Manufacturing

Prime Minister Narendra Modi has set up a 20-year vision to make India a global leader in the semiconductor industry, and in December, the Indian government announced a $10 billion incentive plan to attract semiconductors and display manufacturers to the country.

Immediately after that, local media reported that India and Taiwan are also working to create a semiconductor manufacturing hub in an Indian city. Huang told The Epoch Times that the two countries have long been close partners in the field of semiconductors.

“The sheer level of talent and ingenuity brought by the scholars, researchers, and engineers of India to Taiwanese companies such as TSMC (Taiwan Semiconductor Manufacturing Company) is a testament to our intimate industrial cooperation,” said Huang.

Reports of Taiwan setting up a semiconductor facility in India would likely see one of the island’s semiconductor giants, TSMC or United Microelectronics Corporation (UMC) set up shop in the country, according to the Hindustan Times, an Indian daily.

Huang said Taiwan’s MediaTek Inc., a leading integrated circuit design house, has already made significant investments in India.

“The company is joined by India’s world-class talent. Also from Taiwan, the world’s top electronics manufacturing service companies Foxconn, Wistron, and Pegatron, are stepping up their investment in India and are supported by the country’s PLI (production linked incentive) policy,” said Huang. He added that India, as well as being a potential hub for semiconductor manufacturing in the future, is also a major semiconductor market.

“Building on this strong foundation of both market and government incentives, the opportunities for future Taiwan India semiconductor partnerships are immense,” said Huang.

Citing Indian software companies like Tata Consultancy Services and Infosys that have been in Taiwan for a long time, Huang said that the two sides are primed to further integrate their information technology sectors.

“When we combine our strengths, we form a virtuous cycle and a force for good. Good chakra [wheel], good karma. That’s what the world needs right now. I plus T, it’s a big plus for the world,” said Huang.

A security guard walks past a company logo at the headquarters of the world's largest semiconductor maker TSMC in Hsinchu on Jan. 29, 2021. (Photo by Sam Yeh / AFP) (Photo by SAM YEH/AFP via Getty Images)

‘New Normal’

Huang believes that India and Taiwan could leverage opportunities presented by the pandemic, which has disrupted supply chains and industries around the world, to create a new status quo.

“The new normal will be defined by a newly restructured global supply chain, using new technologies and new discoveries. Again, I plus T. Our capabilities when combined are highly complementary and forward-looking. Our future-oriented industries are precisely geared toward the digital economy,” he said.

The next 30 years of the global economy will be the age of software, according to Huang, and India, a democratic nation, is well-suited to capitalize on this trend.

“You have the economy, you have the technology, and you have the people. I am fully confident India will thrive and shine in the digital era,” he said.

“It is foreseeable that, soon, our daily life will be more digital than ever before. We can envision a world where the online and the offline, the physical and the virtual, are intricately intertwined. The next 30 years will be built on revolutionary, foundational technologies such as blockchain, satellite connectivity, AI, and e-mobility,” said Huang.

He said Taiwan wants to work with the local governments in India to launch industrial and science parks that come with their own townships and living communities.

“In addition to semiconductors, Taiwan hopes to contribute to the growth and development of industry supply chains in India, in areas including machine tools, e-mobility, and various other categories of consumer products,” said Huang, adding that the island would like to cooperate on talent training programs to support the developments of these supply chains in India.

“India is a major supply chain center with unique advantages in digital technology, medical, biotech, healthcare, and space aviation. Taiwan is a powerhouse of semiconductor, ICT, and global supply chain management. Together we can build a win-win future for our two countries and the world.”