Amid escalating global trade tensions, Taiwanese companies are increasingly relocating their supply chains from China to India.
James Huang, Chairman of the Taiwan External Trade Development Council, revealed in an interview with Reuters that Taiwanese firms are accelerating their shift of supply chains to India amidst heightened trade conflicts among major economies. Over the past five years leading up to 2023, Taiwan’s foreign direct investment (FDI) in India surged to over $665 million, a significant increase from nearly $277 million recorded from 2006 to 2017.
Huang emphasised, “It is evident that more Taiwanese companies are moving supply chains out of China and are establishing them in India.” This strategic relocation is driven by Taiwan’s efforts to diversify manufacturing bases amid geopolitical tensions and capitalise on India’s growing appeal as a manufacturing hub.
Despite lacking formal diplomatic relations, India and Taiwan have fostered a robust business relationship, with India actively seeking increased investment from Taiwan, particularly in high-tech sectors like semiconductor manufacturing.
Highlighting a landmark partnership, Taiwan’s Powerchip Semiconductor Manufacturing Corp (6770.TW) recently collaborated with India’s Tata Group to establish Gujarat’s first semiconductor fabrication facility. This initiative, supported by a $10-billion incentive scheme, underscores Taiwan’s commitment to enhancing bilateral economic cooperation.
“We have initiatives in place to train Indian students and professionals in Taiwan’s semiconductor industry, laying the groundwork for future collaborations,” Huang noted.
Taiwan’s shift in supply chains to India has primarily focused on industries such as mobile telephone assembly and footwear. Bilateral trade between India and Taiwan reached $10.1 billion in the fiscal year ending March 2024, reflecting the strengthening economic ties between the two nations amidst evolving global trade dynamics.
