Originally published as Jabin T. Jacob, ‘India-Taiwan Relations: Constrained or Self-Constraining?’, in Jagannath P. Panda (ed.), India-Taiwan Relations in Asia and Beyond: The Future (New Delhi: Pentagon Press, 2016), 37-47.
The big problem in India-Taiwan relations is the lack of ambition. Given the depth of economic relations and often enough, of political ties too, that many countries including in East Asia itself have with Taiwan, one wonders if there is not also a lack of creativity in the case of India-Taiwan ties. The economic dimension in the relationship is often highlighted – the most recent case being the announcement in August 2015 of Foxconn investing (US)$5 billion in India – but it also seems unlikely that the Government of India went out of its way to court Foxconn because it was a Taiwanese company or indeed, that it is going out of its way for any Taiwanese company.
If the Act East policy is an opportunity to recast and revitalise India’s ties with East Asia across dimensions, then this recasting and revitalisation must also cover Taiwan.
If the development of China-Taiwan relations in the decades following China’s economic opening up and reforms is any indication, the story of India-Taiwan relations is one of missed opportunities. This is understandable in some respects, given that India-China relations themselves were only slowly recovering from the 1962 conflict. The 1980s were still early days as negotiations on the boundary dispute were taking off. Still, India took note of Taiwan under the Look East policy fairly early, as indicated by the 1995 establishment of representative offices in Taipei and in New Delhi.
Nevertheless, relations have remained largely constrained as this period also marks the beginning of the inexorable rise of China and the implicit consequent pressure on the development of India-Taiwan ties. Given the importance of Taiwan’s enterprises in pushing forward China-Taiwan ties, the flip side of India’s lagging behind China in economic growth and openness was that the same driver was not available for India-Taiwan relations.
While the beginning of talks on a bilateral Comprehensive Economic Partnership Agreement in the mid-2000s highlighted the importance to India of Taiwan’s economy and its investments, on the political front, matters have remained more or less frozen.
From the time that the first NDA government came to power in New Delhi, there has been an uptick in dialogues and exchanges between think-tanks and sections of government on the two sides mostly related to foreign policy and security issues. However, these interactions have been sporadic, ad hoc and sometimes were also discouraged by sections within the Government of India itself. While there have been unofficial exchanges between the militaries and delegations led by military officials, in India these are not publicised and often not even to scholars and researchers in the universities and think-tanks.
Such diffidence or, perhaps, excessive caution, on the Indian side is without question a result of New Delhi’s one-China policy. That for India, the one-China policy resulted in such diffidence or caution should be a matter of concern not so much for the Taiwanese but from the perspective of Indian national interests. It would not be a stretch to say that the Chinese themselves are surprised at India’s hesitant pace of expansion of its economic and political interests with Taiwan. If most other countries in East Asia, including those immediately neighbouring China, have robust economic ties with Taiwan as well as significant people-to-people movements and interactions, it is a wonder why India with its difficult relationship with China does not/did not interact more closely with Taiwan at multiple levels.
When the new NDA regime came to power, there appeared to be some rethink on the one-China policy, with the new Prime Minister Narendra Modi inviting both Lobsang Sangay, the Tibetan Sikyong and Tien Chung-kwang, the Representative of the Taipei Economic and Cultural Center (TECC), which is Taiwan’s unofficial embassy in India, to attend his swearing-in ceremony in May 2014. Later, in September the same year, the Indian Minister for External Affairs, Sushma Swaraj, went on record at her first formal media interaction stating that the Chinese Foreign Minister was told during his visit to New Delhi that ‘If we believe in one China policy, you should also believe in one India policy.’ She went on to add in response to another question, ‘When [the Chinese] raised with us the issue of Tibet and Taiwan, we appreciated their sensitivities. So we also want that they should understand and appreciate our sensitivities regarding Arunachal.’ Interestingly, Swaraj did not mention Pakistan-Occupied Kashmir, which would have been the more appropriate equivalence than Arunachal, which is, in any case, under Indian administration. The fact that Tibet and Taiwan were mentioned in the same breath should not lead to the conclusion that the Indian government thinks that Taiwan is as important as Tibet is in its foreign policy and security calculations. It is in effect a lack of understanding of the nature of China-Taiwan ties that led the minister to stop at only mentioning Arunachal.
However, quite apart from the issue of the one-China policy, it is also important to remember that Taiwan is not a ‘small’ country, even if in area it is smaller than Bhutan. It is from many perspectives virtually a ‘middle power’, with a population greater than about three-quarters of the world’s countries, a substantial military, an advanced economy, and foreign exchange reserves larger than those of India. It is, thus, doubly a failure of Indian imagination and policy that the relationship with Taiwan remains as underdeveloped as it is today.
The Taiwan-China Relationship: Signposts for India
Over the years, the Communist Party of China (CPC)-ruled mainland has adopted a variety of approaches to bring Taiwan – dubbed a ‘renegade province’ – around. While for most of the Maoist and Dengist eras, there were really no serious attempts at coercion, rapprochement with the US in 1971 did give a fillip to the one-China policy, advantaging the People’s Republic that put the Republic of China in Taiwan on a very shaky footing as far as its international standing was concerned.
As the Dengist era wound down and China became increasingly confident of its economic growth and global political profile, it also seemed to get increasingly impatient about reunification. The run-up to Taiwan’s first free and fair elections for the presidency in 1996 resulted in the Chinese shelling the Taiwan Strait as a warning against independence. When the US intervened with a show of force of its own, sending its aircraft carrier into the waters between China and Taiwan, Beijing learned its lessons and began adopting more nuanced political approaches based on the economic reality of growing economic interdependence between the two entities. It must be noted that India and Taiwan decided to set up their representative offices in 1995 before Taiwan’s first democratic elections. For New Delhi, this was perhaps of a piece with its Look East policy but also part of a realist turn in its policies that was reflected also in its rapprochement with the military junta in Myanmar in the same period.
Lee Teng-hui, the 1996 presidential election winner, was also the first native-born Taiwanese to hold the office. While Lee encouraged the idea of Taiwan as a separate state, the KMT itself remained devoted to the idea of reunification. This period also saw the rise of the Democratic Progressive Party (DPP) that called for complete independence and stressed a separate and unique Taiwanese identity. This trend was continued with the election of the DPP’s Chen Shui-bian as president in 2000 and 2004. The year 2004 also saw the launch of the first official scholarships for Indian students by the Taiwanese Ministry of Foreign Affairs administered through the TECC in New Delhi. These scholarships have continued, no doubt for strategic reasons even though India has naturally not reciprocated.
Once again returning to threatening Taiwan, the Hu Jintao administration in China came up with the Anti-Secession Law in 2005 that virtually guaranteed the use of force as a legal obligation in case Taiwan declared independence. By this time, however, the Taiwanese businesses and economic elites were heavily dependent on China for their economic well-being and ordinary Taiwanese also seemed largely uncomfortable with the DPP’s apparently reckless provocation of Beijing. The corruption scandals swirling around the Chen Shui-bian administration did not help and the KMT returned to the presidency under Ma Ying-jeou. Thus began a period of still closer economic linkages and increasing international space for Taiwan – China stopped poaching from the few countries that still accorded Taiwan diplomatic recognition.
The major losses suffered by the KMT in the nine-in-one local elections – called so because elections were held to nine levels of local government – at the end of November 2014 must have caused China to rethink the scope and recalibrate the pace of its embrace of the island. These elections to city and local governments included 22 seats for city mayors, of which the KMT won only six and three of them by only the thinnest of margins, while the opposition DPP won 13, in addition to supporting several winning independent candidates. The KMT’s loss six years after Ma rode to power was due to both internal and external reasons. But of the reasons for the KMT loss, the growing closeness to China at the perceived expense of Taiwan’s interests was certainly a big one. A proposed economic agreement that the government sought to railroad through the national legislature – that set off the student-led Sunflower movement of March-April 2014 – did not endear Ma to voters either. Adding to the worries of ordinary Taiwanese was Beijing’s apparent breaking of its promises to Hong Kong on the ‘one country, two systems’ formula that in fact had originally been conceived under Deng Xiaoping as a formula for Taiwan’s reunification with China.
With elections to the Taiwanese presidency and to the Legislative Yuan due in 2016, the KMT’s 2014 losses surely played some role in the calculations around the Ma-Xi Jinping meeting in Singapore a year later on 7 November 2015. In the event, this was of scant help to the KMT and in January 2016, the DPP returned to the presidency with Tsai Ing-wen and also won for the first time a full majority in the Legislative Yuan.
The return of the DPP to power does not entirely resolve, however, the ambiguity in Taiwanese society about the larger relationship with the mainland. China’s rapid and continuing economic growth and the close linkages between the two economies are crucial to Taiwan’s own development and progress. Taiwan’s distinct political development and identity formation, however, also mean that China’s ideas of reunification have little traction in Taiwanese society. That said, history and ethnic ties are not easily swept aside either. In fact, more than these factors, it is perhaps a very realistic calculation that independence would invite violent reaction from the mainland, that keeps the Taiwanese sober and realistic. Even the formally pro-independence DPP has come a long way from the days of the aggressively pro-independence Chen Shui-bian.
It is these aspects of the Sino-Taiwanese relationship that many Indian commentators miss or ignore in their prescriptions to the Indian government on Taiwan policy, including calls for New Delhi to consider and engage with Taiwan in the same manner that the China-Pakistan relationship operates.
Prospects for India-Taiwan Ties
The symbolism of the Indian Prime Minister Narendra Modi’s invitation to the TECC Representative to attend his swearing-in ceremony in May 2014 is important. That invitation was both an acknowledgement of gradually increasing contacts between the two sides in recent years and signified still greater interest in developing the relationship in the days ahead. Nevertheless, these contacts in the official realm are still extremely limited, when there is substantially more that could be done, besides the sporadic contacts between a few think-tanks.
The number of academic scholarships between the two sides has remained low and is mostly supported by Taiwanese institutions. Also, they are disproportionately awarded to students in the sciences. Far fewer opportunities are available for Indians interested in the Chinese language or in the social sciences. A skewed equation in favour of just the sciences ultimately does little to increase understanding between the two sides in the political, security and cultural realms – scientists generally communicate in English and remain largely apolitical. If the Taiwanese government or its institutions think that they are gaining political capital with New Delhi by disbursing science scholarships, they are mistaken. Those Indians genuinely aware of and deeply interested in Taiwan would come from the humanities and social sciences streams. These are the segments that remain largely ignored or undervalued by Taiwan’s diplomatic strategists.
What is more, under the KMT regime, perhaps because of Taiwan’s economic difficulties, scholarships and support for Chinese language studies for Indian students came down substantially. This in effect displayed either a lack of political foresight about the potential India offered or the belief that maintaining a stable relationship with China was Taiwan’s overriding necessity that would not be alleviated by diversifying and deepening ties with other countries. However, this is a crucial area of investment if Taiwan is to have a long-term hope of support from India for greater international space. Greater knowledge and understanding of Taiwan in India that comes from student and youth exchanges are imperative for any sustainable relationship, including the development of economic relations.
Meanwhile, some progress has been achieved at least from a logistical or bureaucratic point of view in India-China relations with the decision in India by the Association of Indian Universities to recognise degrees granted in Taiwan.
People-to-people contacts meanwhile remain limited – Indian immigration officials till even a decade ago often had trouble distinguishing between the Republic of China in Taiwan and the People’s Republic of China. There is rather more knowledge of Taiwan within academic institutions and think-tanks in India, particularly those based in Delhi, as scholarly exchanges and conferences on Taiwan-related themes have increased over the years. Buddhism also is a factor that increases India’s importance for ordinary Taiwanese otherwise put off by impressions of a general sense of chaos and lack of safety in India. As a result, tourists from Taiwan do make their way to India and the process is made easier still with the extension of the visa-on-arrival facility to Taiwanese citizens in addition to those from China, Hong Kong and Macau.
Moving on to issues specifically related to the political and economic domains, there are hardly any substantive interactions between India and Taiwan. While there is some level of unofficial military exchanges, as already mentioned, the Taiwanese are also engaged sporadically and in limited numbers at the Track 1.5 level and below, as for example, in the form of invitations to Taiwanese scholars to IDSA’s annual Asian Security Conference.
On the economic side, too, there is a political reality that Indian actors need to understand, especially in the wake of the victory of the DPP in the 2014 local elections. The DPP’s mayors as well as its legislators understand that the prosperity of their cities and country remains closely tied to the mainland and are unlikely to push for radical new measures asserting Taiwanese independence in international forums. What is more likely is a go-slow or a more careful negotiation over the terms of new economic agreements with China. If the DPP is serious about alternatives to China, then this will be proven only by how actively its mayors court economic investment from and opportunities for their entrepreneurs in other countries in Asia.
This is where India might need to take a leaf out of the Chinese playbook. China has long allowed its provinces and cities an extraordinary degree of freedom to engage with foreign countries and to develop partnerships with provinces and cities in other countries. Indeed, they have actively courted Taiwanese investments. China has hundreds of such sister-city and sister-province relationships across the world, including in countries that both the government and ordinary Chinese consider as potential adversaries, namely, Japan and the United States. These partnerships are a source of foreign investments, technology transfers, and people-to-people exchanges, including tourism.
India and China have already inked some such agreements between major cities and provinces. But with DPP city governments seeking to diversify their economies away from China, Indian city mayors should be courting the Taiwanese alongside other East Asians. The Indian Prime Minister’s call for smart cities will also be well served by the focus on Taiwanese cities with their well-managed and technology-enabled city administration and infrastructure. This will require of India, first and foremost, the devolution of greater power in foreign policy issues to local governments in addition, of course, of Indian city mayors also gaining greater powers of administration over their own bailiwicks. At the same time, it is imperative that there is not just a national but a state- and city-level focus in India on the attainment of Chinese and other East Asian language skills as well as knowledge of the international dynamics of the region. India’s candidates for the ‘smart city’ tag will also need to engage in smart international politics and planning.
Meanwhile, the India-Taiwan economic relationship is far from achieving its true potential. Between April 2000 and December 2015, Taiwan’s FDI stock in India stood at just over (US)$165 million, accounting for just 0.6 per cent of total inflows into India in that period despite possessing a foreign exchange reserve of $419 billion as of September 2014. And while great hopes are being pinned on Foxconn’s planned $5 billion investment in Maharashtra in the 2015-2020 period, the Taiwanese strength is in small and medium enterprises, precisely the sector that is capable of providing mass employment in India across a range of skill-sets. Of course, it cannot hurt if the Foxconn investment fructifies and is seen as succeeding, since it would then provide a major fillip to Taiwanese business interest in India. India will therefore need to focus on both prongs of the economic partnership with Taiwan.
The Taiwanese also have substantial and longstanding expertise in physical infrastructure development. In a context when China’s ‘one belt, one road’ infrastructure investment and development initiative is the talk of Asia, and the official Indian establishment remains deeply suspicious of the Chinese plan, it might be useful for New Delhi to include Taiwanese companies in its basket of alternatives and encourage them to take up big-ticket projects in various parts of India.
What is evident from the Singapore meeting of Ma Ying-jeou and Xi Jinping is the immense ability for risk-taking and creativity that the Chinese leader displayed in meeting Ma on the eve of the elections in Taiwan. Despite the many struggles he is engaged with at home, notably the anti-corruption campaign and the downturn in China’s economy, Xi managed to begin yet another important initiative. This, like the others, is no doubt equally debated and contested in the echelons of the CPC. What is more, Taiwan is a sensitive issue of considerable political and historical weight and one which also creates potential challenges to the legitimacy of the CPC and the PRC. This provides opportunities for not just the PRC’s foreign rivals to exploit the situation but is also a slippery slope for Xi domestically.
From the Indian perspective, however, this Chinese move should be both an inspiration and a prod to a greater proactive approach on Taiwan.
India is a huge market and offers prospects similar to what China once offered for both Taiwan’s large corporations as well as its small and medium enterprises. However, the same problems that are likely to afflict Tsai’s attempts to turn the Taiwanese economy around and away from China might also affect her ‘southward policy’, which aims at building deeper engagement with South-East Asia and India, among others. The language and cultural barriers to operating in India are pretty substantial for Taiwanese businessmen. India in its turn has hitherto followed a rather inflexible version of the one-China policy compared with many other nations in East Asia and in the West. Symbolic moves by India notwithstanding, progress on the bilateral economic front has been slow, while contacts even at the functional level between government ministries and departments are intermittent and limited. There is, thus, a case to be made for greater political intervention and interactions in order to promote India-Taiwan relations.
Given that India and Taiwan are both democracies there is much that the two countries could do together. During the May 2014 general elections in India, some 100 Chinese students came visiting to observe the process. How many Taiwanese delegations come visiting during various elections in India? While India and Taiwan have different electoral systems, there must surely be other lessons or insights of operating a democracy that the two sides can share. This then adds another item to the list of opportunities in which India and Taiwan have to engage with each other. For India, President-elect Tsai’s ‘message to the international community … that democracy, as a value, is deeply engrained in the Taiwanese people’ must give cause to find ways of greater engagement with the island nation on that basis.
There is also a case to be built up for greater people-to-people exchanges as well as greater institutional cooperation between universities, research institutions, think-tanks and local governments in India and Taiwan. Given the depth and breadth of China’s own contacts with Taiwan and given how important Asian and Western countries interact with Taiwan, there remains little logic for the Indian government to continue with its snail’s pace on pushing forward greater engagement with Taiwan. Even if Taiwanese political leaders in government might be kept at arm’s length, there is no cause to hesitate or go slow on functional cooperation at all levels of government and between all manner of institutions on the two sides.
 Sean Mclain, ‘Foxconn plans to spend $5 billion on factories in India’s Maharashtra state’, Wall Street Journal. 8 August 2015, http://www.wsj.com/articles/foxconn-plans-to-spend-5-billion-on-factories-in-indias-maharashtra-state-1439035640
 Ministry of External Affairs, India, ‘Transcript of External Affairs Minister’s first formal interaction with the media (September 8, 2014)’, http://mea.gov.in/media-briefings.htm?dtl/23982/Transcript+of+External+Affairs+Ministers+first+formal+interaction+with+the+media+September+8+2014
 On the same subject, see also Prashant Kumar Singh, ‘The “One-India policy” needs more thought’, The Diplomat, 5 November 2014, http://thediplomat.com/2014/11/the-one-india-policy-needs-more-thought/
 Elvis Picardo, ‘10 countries with the biggest forex reserves’, Investopedia, 31 March 2015, http://www.investopedia.com/articles/investing/033115/10-countries-biggest-forex-reserves.asp
 See, for instance, Yimou Lee, ‘Shadowy Chinese agency woos Taiwanese to win island back’, Japan Times, 27 November 2014, http://www.japantimes.co.jp/news/2014/11/27/world/politics-diplomacy-world/chinas-shadowy-agency-working-swallow-taiwan/
 Lee would subsequently be expelled from the KMT for founding the pro-independence Taiwan Solidarity Union.
 Wen-Ti Sung, ‘The rise of the “Pan-DPP 6.88”: Leveling the playing field’, Thinking Taiwan, 30 November 2014, http://thinking-taiwan.com/the-rise-of-the-pan-dpp-6-88-leveling-the-playing-field/
 Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India, 2015. ‘Quarterly fact sheet: fact sheet on foreign direct investment (FDI) From April, 2000 To December, 2015’, http://dipp.nic.in/English/Publications/FDI_Statistics/2015/FDI_FactSheet_OctoberNovemberDecember2015.pdf
 Picardo, ‘10 countries with the biggest forex reserves’, n. 4.
 Indian Express, ‘Chinese youth to take part in Election Commission rally today’, 9 November 2013, http://www.indianexpress.com/news/chinese-youth-to-take-part-in-election-commission-rally-today/1192726/
 Democratic Progressive Party, Taiwan, ‘President-elect Tsai Ing-Wen calls for unity following election, Remarks from the International Press Conference’ Taiwan Democratic Progressive Party Mission in the U.S., 16 January 2016. http://us7.campaign-archive2.com/?u=514c164469699ac1ac10bfe93&id=d75de0c99b&e=b579d6a0a4