India and Taiwan Relations UPSC

India Taiwan relations

Background of India Taiwan Relations:

• Post-independence, bilateral ties between India and Taiwan ceased to exist when in 1950 India accorded diplomatic recognition to People’s Republic of China (PRC). 
• Further, during Cold War, even informal ties between New Delhi and Taiwan remained remote, as Taiwan joined the US-led block and India the non-aligned movement.
• This changed in the 1990s when Indian Government reoriented India’s policy towards Taiwan in the face of India’s domestic economic crises and foreign policy challenges. 
• India and Taiwan set up unofficial relations in 1995 with establishment of the India-Taipei Association (ITA) in Taipei (Capital of Taiwan). 
• Also, Taipei Economic and Cultural Centre (TECC), founded in 1995, is Taiwan government's representative office in India. It is responsible for promoting bilateral relations in the areas of economy, trade, investment, media, tourism, culture etc.
• However, India does not have any official diplomatic relations with Taiwan and nor does it recognise Taiwan as independent country. 

Strategic Prospects of India Taiwan Relations:

• The growing assertiveness of China in the region, has become a medium to bring strategic communities of India and Taiwan closer for their security interests.
• Through this, Taiwan can further consolidate its identity as an independent state and India can ensure freedom of navigation in South China Sea and further expand its oil and gas exploration activities in the region.
• Taiwan sees itself as an important member of the Asia-Pacific region and accepted its responsibility to contribute to regional peace, stability and prosperity, which overlaps with India’s vision for the region.

Economic prospects of India Taiwan Relations:

• The two countries signed Double Taxation Avoidance Agreement and the Customs Cooperation Agreement in 2011.
• Between 1995 and 2018, bilateral trade turnover has grown manifold from $934 million to $7.5 billion (went down to US$ 5.8 billion in 2019). Target is to achieve a trading volume of US$ 10 billion by 2020.
• Taiwan possesses huge foreign reserves and is known for its expertise in the field of hardware manufacture, construction, mines exploration, electronics, and automobiles etc.
• Thus, it can play a critical role in the success of the Make in India, Digital India, and Skill India initiatives, through collaboration between India’s expertise in software and Taiwan’s in hardware. 
• India has abundant natural bamboo resources while Taiwan owns the world-class bamboo charcoal technology. With this India can make use of its bamboo resources to produce high value-added goods.

Cultural diplomacy and People to People relations of India Taiwan Relations

• With increasing emphasis on soft diplomacy in foreign policy, religious tourism has great potential, considering Buddhism is the majority religion in Taiwan and India is its birth place.
• India has extended e-visa privileges to those traveling from Taiwan for tourism, informal business trips, while Taiwan allows online travel authorization and 30-day visa-free stay for eligible Indian visitors.
• Taiwan is host to 160 accredited universities that accept hundreds of thousands of international students every year. Degrees earned in Taiwan are recognised worldwide.

Challenges in India Taiwan Relations:

• China opposes any official contact between Taiwan and other countries and has asked India in the past to strictly follow ‘one-China’ policy. Closer relations with Taiwan might upset China, especially when bilateral relations are going through a difficult phase and military tensions on border are rising.

• Despite the economic interests of the two nations, the economic exchange is still insignificant. Bilateral trade is around 1 % of total trade for both countries.

• Taiwanese entrepreneurs complain about long drawn review process, longer clearances (like no single window clearance), non-availability of and one-time banking clearance to bring in capital in India etc.