India-Taiwan ties: A quiet cooperation in shifting geopolitical landscape

The Republic of China (ROC), now known as Taiwan, celebrated its 113th National Day on October 10. Established on January 1, 1912, ROC’s journey has been marked by complex history, geographical shifts, resilience, economic transformation, and a unique position in global geopolitics. With its ongoing tensions with China, Taiwan continues to lead in futuristic technology, mainly in the semiconductor sector, and navigate its external ties with countries like the United States and India.

While its external ties, including those with India, are mostly unofficial, Taiwan has come a long way in the past three decades in engaging with India. A drastic shift has been seen in the last ten years under the Narendra Modi administration when Delhi seemingly came out of its historical hesitation in engaging with Taiwan. Economic ties between India and Taiwan have flourished, but there remains one question Delhi prefers not to address: Whether a Taiwan contingency would also be an Indian contingency.

Brief history of ROC

ROC’s evolution traces back to the pivotal moment in 1911—the Wuchang Uprising —that ignited a nationalist revolution, reshaping China’s political landscape. The uprising led to the fall of the Qing dynasty—the last imperial dynasty to govern China. The success of this uprising paved the way for the establishment of the Republic of China (ROC) in 1912, making it the first formal republican state in Asia and the rise of a new era in China’s political history.

The ROC government initially governed mainland China. Meanwhile, the close contest between the Kuomintang—the party that ignited the ROC formation—and the Mao-led Communist Party forced the Kuomintang government to flee to the nearest island of Taiwan, freed from Japanese preoccupation in 1945.

ROC retreated to Taiwan in 1949, with the Kuomintang (KMT) government re-establishing its seat in Taipei. Meanwhile, over the decades, ROC Taiwan has gone through significant political changes to become a modern-day democracy, which contrasts mainland China’s One-Party rule.

Having lost its UN recognition to the People’s Republic of China (PRC) under the “ One China ” policy, Taiwan continues to navigate threats from China, sustain its economy and tech might, and deepen its unofficial external ties, including with India.

India’s brief affair with ROC, 1947-1949

Soon after its independence, India formalised diplomatic ties with the Republic of China (ROC). However, with the establishment of the People’s Republic of China (PRC) under the Communist regime of Mao Zedong in October 1949, India recognised the PRC, eventually ending the formal recognition of the ROC, which was now lodged in Taiwan. This was a very brief diplomatic affair of two years.

Taiwan’s search for national identity and its rise as a tech giant

Taiwan declares itself a sovereign, independent nation that China challenges under its “One China” policy, causing regional tensions, especially in the Taiwan Strait—a critical waterway separating Taiwan from mainland China. Despite Beijing’s escalating threats and grey-zone tactics—pressure through military, economic, and diplomatic threats—Taiwan has become a global high-tech powerhouse, playing a pivotal role in the semiconductor industry, which is crucial to the world’s technological future.

Today, Taiwan produces 60 per cent of the world’s chips. It is a leader in advanced manufacturing, including 3 nanometres made by Taiwan Semiconductor Manufacturing Company (TSMC)—often referred to as a “pure-play” foundry and “sacred mountain protecting the country” from all Chinese gimmicks to control it.

With its limited external engagements, Taiwan has tread carefully to preserve a handful of unofficial partnerships, including critical relationships with the United States, Japan, Australia, and India and expanding ties with European countries like the Czech Republic and Lithuania. The United States has remained one of Taiwan’s most vocal and steadfast strategic partners, carefully balancing this support with its adherence to the “One China” policy while providing critical defence and economic assistance to Taipei.

1995: A pivotal year in India-Taiwan ties

Taipei’s interaction with India today has no less than been a surprise. To begin with, after a brief affair between 1945 and 1949, the re-engagement started with the establishment of Taiwan representative offices in Delhi in 1995—the India Taipei Association in Taipei and the Taipei Economic and Cultural Centre (TECC)—mainly aimed at expanding trade and economic ties. But this relationship has not been without Beijing’s pressure.

Among many in the past, a notable incident occurred in July 2018, when China demanded that India’s national carrier—Air India—refer to Taiwan as “Chinese Taipei”—a term also used by international organisations, including the UN WTO—which was adopted in the 1980s to allow Taiwan to participate in global events, notably the Olympics, without challenging China’s sovereignty claims. The emergence of this term was seen as a compromise to ensure Taiwan’s inclusion while maintaining Beijing’s stance on the “One China” policy.

Since 2016, India has emerged as a key foreign policy priority on the economic front, including regular people-to-people exchanges, under the purview of Taiwan’s “ New Southbound Policy ”—to foster “links between Taiwan and the nations of ASEAN and South Asia as well as New Zealand and Australia in the areas of economic and trade relations, science and technology, and culture”—which finds convergence with India’s “Act East Policy”.

India-Taiwan ties today

Speaking at the 113 National Day Celebration in Delhi, the TECC head, in his remarks, added that “the bilateral trade volume has surged from $5 billion in 2016 to $8.2 billion in 2023,” which is a notable 64 per cent increase in the bilateral trade. He added that “India stands as Taiwan’s 16th largest trading partner. He also added that “approximately 260 Taiwanese companies operate in India, with a cumulative investment of $5 billion, spanning from footwear, machinery, and auto parts to petrochemicals and Information Communication Technology products”.

On the tech front, the forthcoming joint project between Taiwan’s leading chip foundry, Powerchip Semiconductor Manufacturing Corporation (PSMC), and India’s Tata Electronics will see tech transfer in constructing the first 12-inch semiconductor fab in Dholera, Gujarat. This project marks a major step in advancing India’s semiconductor manufacturing capabilities. This will also be a key step toward producing chips in India, which are essential for a wide range of sectors, including electronics, automotive, telecommunications, and defence, and will undoubtedly deepen bilateral cooperation.

Taiwan has also become a player in spreading Mandarin education in India, especially after the souring of India’s ties with China due to a border conflict in June 2020. Representative to India Baushuan Ger adds that Taipei has set up “36 Taiwan Education Centres across Indian university campuses, where over 14,000 Indian students have taken Mandarin courses”. And with approximately 3,000 Indian students studying in Taiwan, the educational exchanges are poised to grow.

Interestingly, in February this year, Taiwan signed a labour mobility agreement with India to invite 100,000 Indian workers to address labour shortages in Taiwan’s industries. However, the agreement sparked divided opinions among the Taiwanese public and officials, influenced by outdated perceptions of India. While Taiwan’s Ministry of Foreign Affairs issued a clarification, the agreement has yet to proceed in terms of execution.

While India may be emerging as a critical player in Taiwan’s foreign relations, one question Delhi remains hesitant to confront is whether a potential Taiwan contingency would also become an Indian contingency. As economic ties deepen and strategic interests align, and given the volatile situation on the long and contested Line of Actual Control (LAC) high in the Himalayas, Taiwan watchers in India argue that India must take ‘Taiwan contingency’ seriously to counterbalance China.

Although India may dodge directly answering this question, its growing partnership with the United States and its key role in the Quadrilateral Security Dialogue (Quad), where it advocates for a free and open Indo-Pacific, reveal a more cautious yet evolving stance. While balancing delicate relations with Beijing, India’s involvement in the Quad subtly signals its alignment with efforts to counter China’s assertiveness in the region.

Rishi Gupta is the Assistant Director at the Asia Society Policy Institute, Delhi. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.