To get more Taiwanese investment, India should ease labour laws and streamline work visas, Kristy Hsu, director of the Taiwan-ASEAN Studies Center, has said in an interview to Moneycontrol news website.
A free trade agreement (FTA) between Taiwan and India would be mutually beneficial, which would not only boost ties but also create economic opportunities for both sides, Kristy Hsu, who is from the Chung-Hua Institution for Economic Research, has said.
India will play a bigger role in global trade, especially in labour-intensive sectors, as it builds its supply chains, she said, adding that Taiwanese companies and their customers want to delink from China.
“Taiwan did an FTA feasibility study with India 10 years back. It wants an FTA with India. If India wants to export agriculture products to Taiwan, we will reduce our tariffs through FTA,” Hsu, who also advises the Taiwan Chamber of Commerce in India (TCCI), said in an interview to Moneycontrol.
If India were to reduce tariffs on imports of components needed by Taiwanese companies manufacturing in India, it would give a fillip to trade, she said. To attract more Taiwanese investment, India should ease labour laws and streamline work visas, she said.
Taiwanese companies have stepped up investment in India, particularly in sectors such as electronics manufacturing, semiconductors and electric vehicles (EVs).
Major Taiwanese companies such as Foxconn, Wistron, and Pegatron largely import electronic integrated circuits, semiconductors, EV components, and machinery from Taiwan.
In FY25, bilateral trade between India and Taiwan stood at $11.8 billion, 17 percent higher than the previous year.
Over the past decade, Taiwanese companies’ interest in investing in India has surged, she said. In 2015, TCCI had around 80 member companies, which has grown close to 200 now.
“In terms of trade, India will play a better role in the future. India is building its own supply chains…” Hsu said, adding that this has resulted in FDI from Taiwan reaching historic highs in the past four to five years.
According to India’s commerce and industry ministry, FDI from Taiwan surpassed $665 million between 2018 and 2024.
“Many labour-intensive sectors are moving to India. Taiwanese companies and their western customers want to delink from China. So new supply chains have to be built,” Hsu said.
Vietnam has a labour and electricity shortage. “Thus, Taiwanese companies want to relocate some supply chain to India. Foxconn is the biggest example. It’s assembling most of the iPhones in India,” she said.
“Foxconn China is producing iPhones for the Chinese market, but for the U.S. and other markets, iPhones being manufactured in India are being exported.”.
India needs to further relax its regulatory framework to become investor-friendly. “Taiwanese companies have been facing a lot of work visa issues. It takes a lot of time for visas to be issued. Also, the labour laws are rigid,” she said.
Vietnam attracted a lot of Taiwanese investment because it was flexible with regulations. India should do that too, she said.
India should send delegates to Taiwan to talk to businesses to make them aware of Indian laws, regulations and other challenges.
Taiwan exports mainly integrated circuits, machinery and mechanical appliances, electrical machinery, plastics and plastic products, iron and steel, and medical instruments; while India exports refined petroleum, raw aluminium, ferroalloys, marine products, cotton raw and waste, and organic and inorganic chemicals.
After severing diplomatic relations in favor of the People’s Republic of China (PRC) in 1949, both countries do not maintain official diplomatic relations. India does not officially recognize Taiwan, but its economic and commercial links as well as people-to-people contacts with Taiwan have expanded in recent years. Both countries relations have been improved since 1990s.
According to the Taiwan Republic of China website, when the Indian government initiated “Look East Policy” in early 1991, Taiwan and India started to approach each other and loosen visa restrictions. In 1995 the two countries established representative offices in each other’s capitals, namely Taipei Economic and Cultural Center in India (TECC) for ROC (Taiwan) in New Delhi and India-Taipei Association (ITA) for India in Taipei.
In December 2012, Taipei Economic and Cultural Center in Chennai was established. Taipei Economic and Cultural Center in Mumbai formally operated in Oct 2024 as part of the ongoing efforts to facilitate bilateral exchanges in the areas of trade, investment, technology, culture and education with West India.
Three retired Indian service chiefs visited Taiwan in August 2023 to take part in the Ketagalan Forum to discuss defence and security issues in the Indo-Pacific.
Taiwan government actively promotes the “New Southbound Policy,” assisting businesses in diversifying their presence overseas. India, benefiting from a demographic dividend and robust domestic market demand, is considered a crucial partner country under our “New Southbound Policy”.
These efforts aim to assist Taiwanese enterprises in cultivating the Indian market, diversifying their overseas market expansion, and utilizing India’s vast domestic market as a foundation for expanding their global economic and trade networks.
India and Taiwan are powers navigating a region marked by increasing volatility. They face assertive neighbors, economic coercion and the constant threat of strategic escalation. Unlike other regional actors, they have no diplomatic buffer or “exit” from these tensions; they must contend directly with the China challenge. In this context, silence or inertia is no longer a viable policy choice, the Taipei Times newspaper reported.
This year’s 30th anniversary of TECC and ITA is not just a moment to commemorate; it is a strategic opportunity to reimagine the future of India-Taiwan relations. This requires more than cautious optimism. It demands policy clarity, public articulation and a proactive road map for cooperation across sectors.
By Veeramalla Anjaiah
Wednesday, October 8, 2025