As Prime Minister Narendra Modi embarks on his third consecutive term, India-Taiwan relations are poised for further growth, driven by economic, technological, educational, and strategic considerations. Over the past decade, both parties have made notable strides in strengthening ties, particularly in trade, investment, and technology. Despite the diplomatic constraints imposed by India’s adherence to its “One-China Policy,” pragmatic engagement has enabled both sides to foster deeper cooperation. Looking ahead, the future of India-Taiwan relations appears promising, with opportunities for expansion in key sectors: such as electronics, information technology, renewable energy, semiconductors, and education.
Indo-Taiwan Economic Cooperation
One of the most significant aspects of India-Taiwan relations is economic cooperation. Bilateral trade between the two parties has witnessed steady growth over the years. According to the International Trade Administration of Taiwan’s Ministry of Economic Affairs (MOEA, 經濟部) trade between India and Taiwan increased by over USD $8.2 billion between 2022 and 2023, a substantial increase from USD $4.7 billion in the years 2015-2016. This growth highlights the increasing economic interdependence between the two trading partners.
Taiwan’s well-established ecosystem of small and medium-sized enterprises can play a crucial role in complementing India’s “Make in India” and “Atmanirbhar Bharat” (“Self-Reliant India”) initiatives. Taiwanese companies such as Foxconn, Pegatron, and Wistron have already set up manufacturing plants in India, primarily focusing on assembling smartphones for global giants like Apple. Foxconn alone has committed USD $1.5 billion in investments for a new production facility in Tamil Nadu, further strengthening India’s position as a global manufacturing hub.
Apart from electronics, renewable energy presents another promising avenue for cooperation. Taiwan has emerged as a leader in solar and wind energy, and India—with its ambitious renewable energy targets (500 gigawatts of non-fossil fuel capacity by 2030)— can benefit from Taiwan’s technological expertise and investment.
One landmark development in India-Taiwan relations has been progress in the field of semiconductor collaboration. Given the global semiconductor supply chain disruptions caused by geopolitical tensions and the COVID-19 pandemic, India has identified chip manufacturing as a strategic priority. In 2023, Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC) signed an agreement with India’s Tata Group to set up a semiconductor fabrication facility in Gujarat. This joint venture, backed by India’s USD $11 billion incentive scheme for semiconductor manufacturing, marks a crucial step towards reducing India’s dependency on semiconductor imports and fostering self-sufficiency in chip production.
In addition to semiconductor manufacturing, there is immense potential for further collaboration in artificial intelligence (AI), 5G technology, and biotechnology. Taiwan is home to some of the world’s leading semiconductor companies, including TSMC, which produces over 60 percent of the world’s advanced chips. Closer ties between Indian and Taiwanese tech firms can facilitate knowledge transfer, skill development, and innovation in critical industries.
Educational and Cultural Exchanges
Beyond economic and technological cooperation, India and Taiwan have been actively working to enhance educational and cultural exchanges. Taiwan’s Ministry of Education has launched various scholarship programs for Indian students, attracting talent in the science, engineering, and technology fields. As of 2023, more than 3,000 Indian students are pursuing higher education in Taiwan, a significant increase from the few hundred Indian students a decade ago.
Language courses and cultural festivals have also played a role in fostering mutual understanding. The establishment of Mandarin language centers in India and the growing interest in learning Mandarin among Indian students indicate a rising curiosity about Taiwan’s culture and language. By the end of 2024, Taiwan has established 39 language centers in India to promote educational and linguistic cooperation. Similarly, India’s rich cultural heritage—yoga, Bollywood, and traditional arts—has found a growing audience in Taiwan, strengthening informal diplomatic ties between the two parties.
Image: Then-President of the Legislative Yuan You Si-kun (游錫堃) (right) meets with Manharsinh Laxmanbhai Yadav (left), Director General of India Taipei Association (September 12, 2023). With the lack of official diplomatic ties, diplomatic relations between India and Taiwan are handled through such unofficial exchanges. (Image source: Legislative Yuan / Wikimedia Commons)
India-Taiwan Diplomatic Relations under Modi
Taiwan’s role in India’s foreign policy under Modi 3.0 will remain pragmatic, balancing economic opportunities with geopolitical realities. While India is unlikely to formally alter its One-China Policy, increased economic, technological, and strategic engagement with Taiwan is expected. These developments will contribute to a more nuanced and flexible approach, ensuring that India’s interests in the Indo-Pacific are safeguarded without provoking unnecessary confrontation with China.
Despite growing bilateral cooperation, diplomatic constraints continue to pose a challenge. India does not officially recognize Taiwan as an independent nation due to its adherence to the One-China Policy. This limits the scope of engagement in certain areas, particularly in defense cooperation and formal diplomatic relations. However, both parties have found innovative ways to enhance their partnership within existing diplomatic frameworks. The Taipei Economic and Cultural Center (TECC) in India and the India-Taipei Association (ITA) in Taiwan serve as de facto embassies, facilitating trade, cultural exchanges, and policy dialogues. There has also been an increase in high-level visits, with parliamentary delegations from both parties engaging in informal diplomacy to strengthen ties.
The evolving geopolitical landscape offers new opportunities for India and Taiwan to align their strategies. Both parties share democratic values and a commitment to a rules-based international order, positioning them as natural partners in regional security and economic frameworks.
One of the key areas of convergence is supply chain resilience. The global supply chain disruptions caused by the US-China trade war and the COVID-19 pandemic have underscored the need for diversification. India and Taiwan, along with like-minded partners such as Japan, Australia, and the United States, have been exploring mechanisms to reduce dependence on China-centric supply chains. Taiwan’s participation in India’s Production-Linked Incentive Schemes for electronics and manufacturing is a step in this direction.
Maritime security is another area where India and Taiwan can collaborate. While India has traditionally refrained from military engagement with Taiwan due to its strategic partnership with China, increased naval cooperation in freedom of navigation and counter-piracy operations in the Indo-Pacific could be explored under informal mechanisms. Given China’s increasing assertiveness in the Taiwan Strait and the broader Indo-Pacific, there is growing alignment between India’s Act East Policy and Taiwan’s New Southbound Policy.
Prospects for Deepening India-Taiwan Ties
In the coming years, India and Taiwan will have the potential to significantly enhance their relationship through various collaborative avenues. One key area is strengthening economic and trade agreements. Despite the impressive growth in bilateral trade, the introduction of a Comprehensive Economic Cooperation Agreement or a bilateral investment agreement could serve as a catalyst for increased trade and investment, benefiting both economies. Another promising sector is that of semiconductors and high-tech industries. India can attract more Taiwanese semiconductor companies to establish fabrication units, R&D centers, and training institutes, capitalizing on Taiwan’s cutting-edge technology to build a thriving semiconductor ecosystem in India.
In the realm of education and research, fostering deeper collaborations between India and Taiwan in education, research, and supply chain resilience will be crucial for strengthening their ties. Expanding joint research programs, student exchanges, and academic partnerships can promote robust knowledge exchange, while strategic cooperation in supply chains will enhance resilience under global frameworks like the Quad and the Indo-Pacific Economic Framework. The Quad—with its shared interests in maintaining stability in the Indo-Pacific and responding to China’s growing influence—provides a platform for such collaboration, without naming China as the explicit object of focus. It also facilitates cooperation in critical sectors like technology, semiconductors, and supply chains—areas where both India and Taiwan excel. This aligns with India’s strategy to deepen regional economic ties, including with Taiwan, while maintaining diplomatic balance through multilateral engagement. The Quad thus serves as an effective mechanism to promote closer India-Taiwan cooperation, advancing economic and security goals while respecting the “One China” policy and regional stability.
Finally, leveraging cultural diplomacy will play a key role in strengthening soft power and building people-to-people connections. Initiatives such as film festivals, art exhibitions, and language training programs can deepen mutual understanding and appreciation, bridging the cultural gap between the two societies. By focusing on these diverse areas of cooperation, India and Taiwan can unlock their full potential and build a multifaceted and sustainable partnership for the future.
The main point: Taiwan’s importance in the Indo-Pacific is growing, driven by its semiconductor industry and security challenges from China. Under Modi’s leadership, India’s Act East Policy fosters cooperation, especially in trade and technology. While a formal security alliance is unlikely, multilateral platforms like the Quad may deepen Indo-Taiwan ties.
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