Taiwan’s economic well-being hinges on the business climate of its major trading partners. And as Europe and the U.S. continue to struggle with the specter of a double-dip recession, India is emerging as one of the fastest growing economies in the world, explaining why the ROC government is bolstering ties with the South Asian nation.
Against this backdrop, Pradeep Kumar Rawat, director-general of the India-Taipei Association, discussed the state of Taipei-New Delhi relations in a Sept. 23 interview with Taiwan Today. He highlighted the major achievements of both sides in recent years and proposed areas of bilateral collaboration that promise to deliver bountiful dividends to the two nations.
“As far as I see it, Taipei-New Delhi relations are very good,” Rawat said, adding that India’s relationship with Taiwan has been constantly expanding since the ITA office opened in 1995.
In fact, India’s highest ranking official in Taiwan believes there has been “a marked jump” in bilateral ties over the past two years, attributing this development to a number of reasons, such as Taipei’s improved relationship with Beijing.
“When Taiwan has good relations with its neighbors, it will be able to devote more energy to expanding relationships with other countries,” he said. “Efforts to promote bilateral ties by the two countries are beginning to pay dividends.”
Evidence of this healthy state of affairs between Taiwan and India include the agreements on double taxation and customs cooperation concluded just a few months ago. “These pacts are needed as bilateral trade grows, because they will facilitate legitimate business and eliminate unlawful activity,” Rawat said.
According to government data, Taiwan-India trade was US$5.47 billion for the first eight months of this year, up 32.54 percent from the same period in 2010.
Rawat believes the two nations can leverage their respective advantages and devise a winning strategy for their businesses. “We welcome all Taiwanese companies to look at India as a serious investment destination.”
The Indian economy, which is driven by its 300 million-strong population, glitters alluring for overseas firms, he said. And as Taiwan and India enjoy strategic fits in a number of sectors, “Taiwanese firms are in a very good position to capitalize on this expanding consumer market.”
The first sector, Rawat said, is information technology. India has strong research and development capabilities spanning system integration, embedded chips and chip architecture, he said. “Many Fortune 500 companies have based their R&D centers in India, and I think Taiwanese firms can do the same.”
India is a major manufacturing center for automobiles and world leader in small car production. With Taiwan’s strength in auto components and parts, the two can team up to create better products, he said. India also has ambitious plans for solar energy generation, and both countries can “certainly join hands in these areas to explore all possibilities.”
Cooperation in the field of education also holds much promise. Rawat said there are about 400 to 500 Indian students studying in Taiwan’s universities.
“This is hardly anything considering India’s large population. Taiwan will have no difficulty attracting 40 times the current number given its relatively low costs of education and living, connectivity to the global education network and adequate English-speaking environment. I see a very good future for bilateral cooperation in this sector.”
Despite many of Taiwan’s neighbors, including Japan, South Korea and mainland China, discovering India’s economic potential and making their moves, the island has not been as aggressive as its Asian rivals, Rawat said.
Government statistics reveal that from 2001 to 2010, India accounted for only 0.04 percent of all foreign direct investment in Taiwan, while only 0.03 percent of outgoing investment went to the South Asian country.
“Taiwan and India have already signed several economic cooperation agreements, so there should be no barriers in terms of institutional framework,” Rawat said. “Cultural or language barriers are not a problem, either, because Taiwanese are probably more internationalized than the Japanese and South Koreans.”
Rawat attributes Taiwan’s lack of corporate interest in his country to a lack of education about the market. “We probably have not done enough to make people in Taiwan aware of the opportunities available in India. The media, government agencies and business associations from both sides all need to do more.”
Business promotion tours such as the one organized by Taiwan’s Council for Economic Planning and Development in February play a key role in promoting awareness among both countries’ private sectors,” Rawat said. “We would like to see these kinds of activities happening more often and are looking forward to another one in November or December.”
Another initiative signaling the determination of both countries in this regard is a feasibility study on a Taiwan-India free trade agreement. Beginning in February, lead-up work on the agreement has been conducted by Taipei’s Chung-Hua Institution for Economic Research and the Indian Council for Research on International Economic Relations.
“This is the first time we have begun looking at the issue systematically,” Rawat said. “The academic institutions are working on suggestions as to how both nations can upgrade their economic relationship beyond where it stands today.”
Set to run for two years, the study is ahead of schedule and could be completed earlier than expected. “The sooner we conclude the project, the better it will benefit our economic engagement,” he said.
While the Cross-Straits Economic Cooperation Framework Agreement (ECFA) has greatly boosted Japanese firms’ interest in investing in Taiwan, Rawat said he is yet to see such a response from Indian companies. “I hope the feasibility study will look at this issue in greater detail and see how the ECFA can benefit our bilateral relationship.”
Rawat is optimistic about the future of Taiwan-India ties, and is especially upbeat on economic interaction between the two nations.
“Taiwanese businessmen are very intelligent, so they will naturally be looking at diversifying their risks,” he said. “India is one of the better opportunities for Taiwan businesses and I am quite convinced that in the next five years we will see bilateral relations scale new heights.” (HZW-JSM)
Write to Meg Chang at meg.chang@mail.gio.gov.tw