Tsai Ing-wen’s return to power last month means that her flagship New Southbound Policy (NSP) is here to stay. President Tsai’s long-term vision to integrate Taiwan with the most dynamic countries in Asia, extending all the way to South Asia, and her comeback, offers a renewed opportunity to boost Indo-Taiwan relations. Her previous stint showed the potential of cooperation especially in economics, which India should now pursue with greater vigor. With India’s recent disappointing economic growth news, the country stands to gain even more from a deeper relationship with Taiwan’s economy since the two economies hold important complementarities.
China is commonly identified as presenting a hurdle that looms large for India. However, Tsai’s NSP arguably provides a pragmatic pathway for India to circumvent the China obstacle. The NSP’s emphasis on economic, educational and cultural relations makes it harder to argue against since the ostensible goal is to promote development across the region. Presumably, the Tsai administration will pump more money into NSP and continue to devote attention to it. In this era of shrinking economic resources and rising protectionism globally, Tsai’s gambit stands out as an exception. While Indo-Taiwan relations have been on the upswing over the last several years, the gap between reality and possibility is still large.
Economics as Leading Edge
India and Taiwan are Asia’s third and tenth largest economies respectively. But Taiwan holds a special allure for India which is struggling to increase its manufacturing with Prime Minister Narendra Modi’s “Make in India” promise sputtering. Taiwan boasts 47 “corporate giants” (India has 58), many of which are concentrated in areas that India desperately needs investment in such as information and communications technologies, electronics, healthcare, advanced food processing and solar power. Taiwan is also a leader in 21st century smart cities design which India has also announced as a priority. In 2018, top industries officials from the vibrant Indian state of Tamil Nadu visited Taiwan and subsequently are charting out a plan to replicate the model of the successful Hsinchu Science Park. Tamil Nadu wants to woo information and communication technology companies (for manufacturing and research) and expects Taiwanese companies to invest in a range of products in next generation electronics and hardware.
Taiwan’s global giants like Foxconn and Wistron are already involved in India but more can be done to ensure their presence and increased investment. Just last month Foxconn had to deny a report that it was cancelling a new factory for consumer electronic production in India over a dispute with Apple, a report that the Indian Industries Minister had apparently prematurely announced. Taiwanese companies of course came much later to India than their Japanese and Korean counterparts and do not have the same level of experience in dealing with India’s still daunting regulatory regimes, markets, distribution networks (and politics for that matter). Latecomer Taiwan may get some new advantages though. The World Bank’s Ease of Doing Business index shows a marked improvement for India: in 2016 India ranked 130 out 190 countries, then jumped to 100 in 2017 and in 2019 rose to 63. But being a newcomer, Brand Taiwan does not enjoy the same exposure as Japanese and South Korean brands. This is beginning to change thanks to some bold and non-traditional thinking on the part of Taiwan’s government.
Changing the Game
In 2017, Taiwan Excellence, run by the Taiwan Bureau of Foreign Trade became a sponsor of Mumbai Indians, one of the most popular cricket teams in the Indian Premier League. It is owned by Mukesh Ambani, the richest Indian. Brand sponsorship in cricket is huge business and is awarded to the highest bidders. In the world of cricket business, India is a superpower. Taiwan Excellence represents the image of Taiwan’s most competitive and innovative industries and the tie up with Mumbai Indians franchise is a way to create greater popular awareness of Taiwan in India. Michael Lin, Director of the Taipei World Trade Centre Liaison Office in Mumbai declared that “Just as the Mumbai Indians are hot favorites and one of the best teams in the IPL, Taiwan Excellence too is one of the most celebrated technology producers in the world. This partnership means an amalgamation of two of the greatest teams in the business.”
Several top Indian cricketers from the Mumbai Indians were even brought to Taiwan for a high-profile visit in 2018 to try out Taiwan made virtual reality games. The Indian cricket stars were cheered on by a large crowd as they played a virtual reality cricket game. Taiwan Excellence’s linking up of cricket-crazy India and baseball-crazy Taiwan just represents one way to bring economic and cultural soft power together in a winning strategy for both sides.
Beginning in 2018, Brand Taiwan is also gaining recognition through the Taiwan Expos being conducted in important target countries under the NSP like India. Last year, the high visible event brought about 150 exhibitors to New Delhi, with green products, smart living solutions, tourism, medical equipment and bubble tea comprising some of the most popular pavilions. In just the first two days, the Expo attracted nearly 40,000 visitors.
Looking ahead, the biggest challenge to stimulating Indo-Taiwan ties, economic or otherwise, may prove to be the domestic turmoil the Indian government is mired in after its passage of the Citizenship Amendment Act in December 2019. Prime Minister Modi needs to steer the country back to a more stable and inclusive internal environment. Otherwise, his own second term could be lost in domestic controversy at the cost of international opportunities, including those to be gained from Tsai’s second term.
By Deepa M. Ollapally, Director, Rising Powers Initiative and Research Professor of International Affairs, Elliott School of International Affairs, George Washington University
