Taiwan firms move supply chains to India

Taiwanese companies are moving their supply chains from China to India, said James Huang, chairman of the Taiwan External Trade Development Council.

This aligns with growing economic relations between Taipei and New Delhi amid global trade tensions.

Foreign direct investment (FDI) from Taiwan to India has surged in recent years. Huang cites figures showing a jump from nearly $277 million during the decade from 2006 to 2017 to over $665 million in the five years ending 2023.

This data clearly shows that more Taiwanese companies are relocating their supply chains away from China and establishing them in India, said Huang.

Despite the lack of formal diplomatic ties between India and Taiwan (due to China’s claim over the island nation), the two countries have fostered a close business relationship.

India is particularly interested in attracting investment from Taiwan’s leading chip-manufacturing sector to bolster its own domestic manufacturing capabilities.

While China claims Taiwan as its territory, Taiwan maintains its independence. Additionally, India’s relationship with China remains strained, particularly over a disputed border region where a deadly clash erupted in 2020.

Taiwan Semiconductor Manufacturing Corporation (TSMC) partnered with India’s Tata Group to set up the first semiconductor manufacturing plant in western Gujarat state, taking advantage of a $10 billion incentive scheme from the Indian government.

“We have programmes to bring Indian students and talents to be trained in Taiwan in semiconductors and that would pave the path for our future co-operation,” Huang said.

Huang further noted that the focus of Taiwan’s supply chain shift to India has been on mobile phone assembly and footwear industries.

Trade between India and Taiwan has reached $10.1 billion during the fiscal year ending March 2024.

Attribution: Reuters