India and Taiwan have begun talks for a free trade agreement and to set up a semiconductor manufacturing hub in an Indian city, indicating their resolve to further expand two-way economic engagement.
If the move to build a semiconductor manufacturing plant is successful, it would be only the second such facility by Taiwan in a foreign country after its production center in the United States, people familiar with the development said.
He added that the Indian government has already proposed several sites for the facility and one of Taiwan’s leading semiconductor producers including Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) could implement the mega project.
Taiwan is a major player in the production of chips globally. According to industry estimates, TSMC manufactures approximately 50 percent of all semiconductors globally.
“The effort to strengthen FTAs and set up semiconductor hubs has a strategic significance,” said one of the people mentioned above.
Taiwan considers itself a sovereign state. However, China considers Taiwan to be part of its territory.
The move to set up the facility comes amid rising demand for chips by automakers and technology companies in India at a time when there is a global shortage of chips.
People said the proposal to set up a semiconductor hub is largely driven by the strategic importance of the relationship between India and Taiwan and not its commercial aspect.
One of the people mentioned above said, “The semiconductor plant in the US was set up in reflection of the close strategic relationship between the two sides. The same will happen in the case of India.”
The US continues to gain access to Taiwan despite increasing Chinese hostility and reassuring Taipei of its continued support.
The government on Wednesday unveiled a scheme to provide incentives of value 76,000 crore to encourage setting up of Semiconductor Design, Manufacturing and Display Fabrication (FAB) units with the big goal of making India a global electronics production hub.
With their keenness to expand economic engagement, India and Taiwan have already held two rounds of talks for a bilateral investment agreement to strengthen the FTA as well as boost trade ties, the people said.
India has been promoting its relations with Taiwan in the areas of trade, investment, tourism, culture, education and people-to-people exchanges.
Cooperation between India and Taiwan in the areas of trade, investment and industry has increased over the years.
According to official data, bilateral trade volume has increased from US$ 1.19 billion in 2001 to around US$ 7.05 billion in 2018 and India is Taiwan’s 14th largest export destination and 18th largest source of imports.
As of the end of 2018, there were approximately 106 Taiwanese companies operating in India, with a total investment of US$1.5 billion in the sectors of information and communication technology, medical devices, automobile components, machinery, steel, electronics, construction, engineering and financial . Services.
Both sides have formed teams to further expand ties in education as well as skill development training.
Currently, an estimated 2,800 Indian students are studying in Taiwan.
India does not have formal diplomatic relations with Taiwan but there are trade and people-to-people ties between the two sides.
In 1995, New Delhi established the India-Taipei Association (ITA) in Taipei to promote dialogue between the two sides and facilitate trade, tourism and cultural exchanges.
ITA is also authorized to provide all consular and passport services.
In the same year, Taiwan also established the Taipei Economic and Cultural Center in Delhi.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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