India-Taiwan relations under Lai Ching-te: Opportunities and challenges under China's shadow

More than half of the world’s population is expected to exercise their voting rights in 2024, making it a crucial year for the whole world. With the elections in Taiwan, the results of which are expected to resonate well beyond its boundaries, winding up on 13 January, there is little doubt that the Asian geopolitical theatre is set to witness radical developments and changes.

Taiwan’s elections saw the coming of the Democratic Progressive Party’s (DPP) third successive term, with Lai Ching-te, often referred to as a ‘dangerous separatist’ and a ’troublemaker’ by Beijing, succeeding Tsai Ing-wen as president of the Republic of China (ROC).  For India, this comes as good news! The continuance of the DPP and Tsai legacy for another four years provides more diplomatic opportunities for improved bilateral relations and more trade and commercial collaboration.

India-Taiwan relations over the years

In recent years, the ties between India and Taiwan have gained unprecedented momentum, owing primarily to increased support for Taiwan among Indian civil society organisations. Taiwan, in turn, has actively reached out to India, leveraging its carefully crafted New Southbound Policy. President Tsai Ing-wen launched this strategy in 2016, and it serves as a road map for greater engagement with prospective allies and partners, including India.

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India’s Act East Policy and Indo-Pacific outreach efforts have further encouraged Taiwan to broaden and deepen its connection with India. This development, however, is a relatively recent phenomenon influenced by strategic, geopolitical shifts in the region. As the Indo-Pacific construct solidifies, the ties between New Delhi and Taipei are poised to take on a more tangible, institutionalised form and can play a meaningful role in strengthening their bilateral relations, which were established in 1995.

For a significant period, the shadow of China had loomed over India-Taiwan relations. While Taiwan maintained a conciliatory stance toward China before President Tsai’s tenure, India’s multifaceted relationship with China also impeded the strengthening of ties with Taipei. However, China’s reluctance to address India’s territorial concerns and territorial incursions, whether in Doklam or Galwan, prompted India to reassess its China policy, thereby benefitting India-Taiwan relations.

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During the initial phase of Narendra Modi’s government (2014–17), signs emerged of India gradually shedding its hesitancy toward Taiwan, albeit prudential behaviour remained. Tsai Ing-wen’s victory in 2016 represented a watershed moment in Taiwan’s politics, marking a transition away from its economic dependence on mainland China. Taiwan’s New Southbound Policy seeks to diversify its economic and investment relationships, posing issues for governments adhering to a One China Policy, notably India.

Taiwan has identified India as a top priority under its New Southbound Policy, focussing on trade, commerce, economic cooperation, talent exchange, resource sharing and regional connectivity. Keeping up with this, the India-Taiwan Parliamentary Friendship Forum was established in 2016 as a formal platform for fostering friendship.

In terms of commercial and industrial engagement, the Taiwan External Trade Development Council (TECC) and the India-Taipei Association (ITA) formalised a memorandum of understanding in 2017 for the promotion of industry collaboration. This was preceded by multiple MoUs signed between Taiwan’s Chinese National Federation of Industries and the Federation of Indian Chambers of Commerce and Industry in the same year. The inaugural India-Taiwan Trade Forum in Taipei in 2018 and the opening of the Taipei World Trade Centre’s New Delhi office further underscored the growing economic ties.

India’s interest in expanding economic and sociocultural ties with Taiwan is evident. Nevertheless, given the prominent roles both nations play in the world economy, the existing bilateral economic relationship falls short of expectations.

In this regard, both nations should continue to expand their partnership as the relationship between India and Taiwan is set to play a significant role in the evolving dynamics of the Indo-Pacific region.

Bolstering relations under Lai Ching-te

With the DPP winning a third straight term, led by current Vice-President Lai Ching-te, there is expected to be a policy consistency that India could capitalise on to further its ties with the island nation. Lai has pledged to support Tsai’s cross-strait policies, asserting Taiwan’s right to self-determination in the face of China’s territorial claims on the island.

Numerous opportunities for cooperation between Taiwan and India, including commerce, business, tourism, and education, remain inadequately utilised. In light of this, analysts advise that India designate Taiwan as a consultative partner in its Make in India initiative. Simultaneously, Taiwan should also proactively contribute to its South Asian Silicon Valley development project under the Digital India initiative.

Ample opportunities exist for people-to-people engagement between India and Taiwan, ranging from cultural to non-economic links, fostering soft power through academic exchanges, tourism promotion and developmental assistance programs in the foreseeable future. The success of these efforts, however, is dependent on significant financial investment and political commitments that are consistent with India and Taiwan’s national interests.

Deepening the relationship between India and Taiwan aligns with India’s strategic objective of building resilient supply chains in the Indo-Pacific. Taiwan, too, has encouraged its businesses to contemplate relocating production from China to India, marking a strategic shift in economic strategies and a recognition of India’s expanding market. Thus, the potential for mutual benefit through strengthened economic ties underscores the importance of concerted efforts and sustained political commitments from both India and Taiwan.

The road ahead

As India steers through its geopolitical strategy, a rethinking of its Taiwan policy arises as an essential step. India and Taiwan must embark on a consistent and pragmatic approach, untethered from China’s shadow. The relationship between the two democracies holds the potential to open up new avenues for collaboration, particularly in the realms of trade, technology, and people-to-people exchanges.

The third consecutive succession of the DPP presidency, transitioning from President Tsai Ing-wen to President-elect Lai Ching-te, presents a golden opportunity for fostering this continued cooperation. Moreover, given the fluctuations in India’s relationship with mainland China, often marked by border disputes and other geopolitical complexities, a strategic shift towards a more normal and pragmatic relationship with Taiwan becomes prudent.

Analysts believe that India’s existing Act East policy serves as a foundation for increased engagement between the states of north-eastern India and Southeast Asia, providing an established platform for Taiwan to position itself as integral to India’s future economic growth. In this regard, this partnership holds mutual benefits across various dimensions, making it a missed opportunity for both Taiwan and India if they fail to purposefully engage with each other.

The author is presently associated with a premier think-tank in India, specialising in defence, security, and strategic studies. Her research interest and focuses of analysis are defence strategy, geo-economics, foreign affairs, and the implications of Chinese security developments on the region, especially India. Views expressed are personal.

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