Recent diplomatic developments in the Indo-Pacific, notably the People Republic of China’s (PRC) official condemnation of interactions between Narendra Modi and Lai Ching-te (賴清德) in June, have signaled Chinese discontent concerning the increasingly deepening bilateral ties between India and Taiwan. With the diplomatic outreach under the Democratic Progressive Party’s (DPP, 民進黨) New Southbound Policy (NSP, 新南向政策) reciprocated by the National Democratic Alliance’s (NDA) “Act East” approach, the two economies have come closer than ever—with India becoming the hub for supply chain relocations from China, and a migration and mobility agreement facilitating labor-engagement for Indians in a range of Taiwanese sectors. Despite this, the informal nature of the relationship, and India’s traditional posture of non-alignment, raises serious questions about its security commitments.
Broadly speaking, the relevance of the security question must be understood from a two-fold perspective. For Taiwan, with Donald Trump’s interpretation of the longstanding US-Taiwan security relationship as burdensome, a re-calibration of the strategic ties by forging close security-specific engagements with pivotal regional poles like India becomes critically important. While the incumbent US administration remains seriously invested in global security engagements, including in Taiwan, the same cannot be expected from Trump’s isolationist outlook. With The Economist’s most recent electoral analysis indicating growing Republican popularity, it becomes considerably important for Taipei to reassess its stand-alone dependence on American security ties.
Similarly, for India, Taiwanese sovereignty guarantees a key economic partner—providing the nation with an expansive flow of commerce via the Taiwan Strait into northeast Asia. In 2023 alone, Indo-Taiwanese trade stood at USD $8.2 billion, with a growth estimate of 26.6 percent. In addition, the whopping USD $22.9 billion and USD $27.5 billion trade with Japan and Korea respectively in the last financial year means that India has a vested interest in ensuring the continuation of the free flow of shipping through the South China Sea and along the Taiwan Strait. Any implications of a reunification attempt would adversely affect both India’s commercial interests and its economy—setting it back by as much as eight to nine percent of its GDP, according to a recent Bloomberg estimate.
Existing Security Arrangements
Existing Indo-Taiwanese security arrangements are neither robust nor cooperative. While the former’s membership in the Quadrilateral Security Dialogue (QUAD) hints at an interest in the maintenance of a rules-based order in the Indo-Pacific, analysts have variously argued that the bloc is far from a security mechanism. Furthermore, India’s autonomous stance over the conflict in Ukraine, and the absence of any formal security alliance with the United States, speaks volumes about how member-countries position themselves within the forum. Even though the Logistics Exchange Memorandum of Agreement (LEMOA)—a logistics exchange deal with the United States—posits a high likelihood for Indian engagement in cooperating in a contingency, such an agreement circles back to Taiwan’s defense solely depending on Taiwan’s security relationship with the United States. Based on recent rhetoric, some political circles in both Washington and Taipei have become increasingly skeptical about this relationship.
The absence of any reliable alternative defense frameworks implies a lack of any effective deterrence against an incursion. Especially with the high stakes involved, diversification of regional security engagements is necessary. Recent developments, such as an informal Indian delegation comprising its three former service-chiefs to the Ketagalan Forum last year, and a joint military simulation between Indian and Taiwanese think tanks—which this year featured representation from the Institute for National Defense and Security Research (INDSR, 國防安全研究院), the Taiwan government’s defense think tank—indicate an active Indian interest in the security dynamics in the region. However, much remains to be done in order to create a robust extra-US regional security framework.
The Way Ahead
India’s strategic calculus would require any Indo-Taiwanese security engagement to be aligned with India’s interests (both its economic trajectories and geopolitical ambitions); to deploy cooperative and bilateral channels to express an assertive anti-reunification stance; and to avoid antagonizing the PRC by any immediate overt refutation of the “One-China Policy.” Taiwanese security needs to be seen as vital for an India looking to champion itself as leader of the Global South in the long-term, and its foreign policy priorities must reflect that accordingly.
India’s commercial relations with Taiwan need to be seen as a strategic asset. Recent statistics show foreign direct investment (FDI) inflow is expected to grow eightfold, much of it in the electronics and footwear sectors. This is in line with India’s interest in a cooperative semiconductor ecosystem, and builds on its USD $10 billion investment. The projected doubling of trade volume, coupled with Taipei’s emphasis on integrating economic and security diplomacy, makes a case for resuming foreign trade agreement (FTA) negotiations. Such a potential FTA, being commercially aligned, would not be automatically dismissive of the “One-China Policy”—however, it would nonetheless signal India’s role in shaping a supply-chain realignment and cement its vested interests in a long-term collaboration with a de facto sovereign Taiwan. This would imply a natural convergence on shared security interests—within the bilateral ties aimed at retention and furtherance of the supply chains and economic ties—that the two countries have developed.
Further assertion of India’s support must come from its multilateral and strategic diplomatic engagements in the region. India shares a “special strategic partnership” with South Korea and Japan, making collective responses to any Taiwan-specific concerns possible. As recent as 2023, Korean President Yoon Suk Yeol’s remarks about opposing any change of the “status quo” by the PRC led to a diplomatic rift with China. For Japan, the security priority remains clear, especially as Taiwanese sovereignty is approached as a subject of national survival within its foreign policy circles. Indian interests, as such, are on common ground with its partners in the region and there is need for Taiwanese security to be carefully incorporated into the nations’ shared strategic priorities—all the more so, as any PRC-led aggression threatens to cut off India’s ties with Japan and Korea as well.
Two fora are of particular interest in advancing India’s Taiwan-specific commitments: the NATO Indo-Pacific 4 (NATO-IP4), of which countries like Japan, Australia, and Korea, that already share Indo-Pacific engagements with India, are a part; and the ASEAN countries, many of whose bilateral ties with India includes a security-specific convergence on PRC aggression. India’s recent investments promised at the Hanoi maritime-security dialogue, and its long-standing commitments to support Manila over Beijing’s claims in the South China Sea, are steps in the right direction.
Scholars have considered how any crisis in Taiwan could intersect with South China Sea disputes, compromising the sovereignty and commercial interests of several ASEAN economies as a result. Thus, India needs to actively expand its maritime security investments and strategic partnerships with these economies, prioritizing the question of Taiwan and outlining cooperative commitments to work towards a deterrence less reliant on the United States, as the costs of any aggression are likely to be devastating to all parties concerned. Additionally, in the India-led Global South Summit, the priority accorded to sustaining favorable geopolitics for developmental projects means there exists a scope for accounting for the Taiwan question and Indo-Pacific security.
In addition to addressing the Taiwan question through NATO and fora within ASEAN, there is also a critical need for the QUAD to form a comprehensive security policy addressing the Taiwan question. India, for one, needs to step up, as Tokyo and Canberra have been building bilateral security cooperations with Taiwan. For a start, India should seek to bolster its ties by replicating the Australian model that includes engaging Taipei in informal exercises and capacity-building programs, while expanding the scope for technology-specific exchanges. Taiwan’s reciprocal outlook, which would support India’s position in border disputes with the PRC and call out PRC behavior as violating a rules-based international order, would likely also be favorable to such pursuits. In essence, the QUAD needs to reflect a robust cooperative security mechanism built upon ties its member-nations pursue, thereby providing a shared security architecture for the region.
The China Factor
Any engagement with Taiwan, however, must consider potential repercussions from the PRC, as a significant trade deficit places India on an unsteady footing. While Indian exports sit at four percent of total exports, in 2023-24 alone Chinese imports amounted to a 15 percent share of India’s total of USD $680 billion. The impact of any cut in exports could adversely affect key Indian industries. This necessitates a review of India’s inward FDI priorities to focus on attracting Chinese FDIs with an aim to boost India’s global value chain (GVC) integration over time, as the Economic Survey has shown. [1] Moreover, such a shift could limit the PRC’s capacity for economic coercion.
According to Dr. Liu Cheng-Shan (劉正山) from National Sun Yat-Sen University (NSYSU, 中山大学), since the DPP’s objective is gaining recognition for Taiwan, this means that any opportunity for improved relations with a power like India will be actively pursued by the government. [2] How China would respond is of little concern to the DPP, as a security relationship with India is viewed as far more useful for Taiwan’s cause than placating a hostile PRC.
Should the Kuomintang (KMT, 國民黨)—a party more interested in cross-Strait relations—gain popularity in the future, the approach could differ. A KMT government would be unlikely to pursue such a relationship with India, meaning that Indian assertiveness on Taiwanese security is likely to be better reciprocated by the current government. Both the NDA and DPP should, as such, capitalize on their mutual interests and pursue a stepped-up engagement. It is vital that India understands that a positive political environment for security ties with Taiwan outweighs any benefits accrued from an import-specific dependence on the PRC in the long-run, especially given India’s long-standing territorial disputes with China.
While overt recognition remains off the table, India’s foreign policy must prioritize long-term deterrence by building a favorable extra-US regional security environment. This includes the employment of a range of policy measures: such as integrating the Taiwanese question into India’s partnerships and engagements, engaging Taiwanese policy circles both bilaterally and across international fora, and pursuing cooperative-security ties in the interest of a free and open Indo-Pacific.
The main point: Amid rising cross-strait tensions and the emergence of US political circles skeptical about security ties with Taipei, it is vital that New Delhi reassesses its approach. Enhancing economic cooperation to promote bilateral convergence on security interests, incorporating the question of Taiwan within diplomatic engagements, and pursuing cooperative security initiatives would effectively position India as a primary arbiter in deterrence by building a favorable regional security architecture. Prioritizing Taiwanese security is in line with New Delhi’s interests in acting as a leader of the Global South, and preventing PRC actions that seek to destabilize India’s position in the Indo-Pacific.
Acknowledgement: The authors are thankful to Dr. Liu Cheng-Shan (劉正山), Professor of Political Science and the Director of the Institute of Political Science at the National Sun Yat-Sen University (中山大學), Kaohsiung City, Taiwan, for consenting to an in-person interview on July 18, 2024.
[1] Annual report presented by the Indian Finance Minister prior to the Union Budget, highlighting trajectories and projections of the Indian economy. The report for this year was released in July 2024.
[2] Stated during an in-person interview with William Budd on July 18, 2024.
