Fulltext download: Asia Insights 16
Opportunities in Trade and Commerce between India and Taiwan in the Post-COVID-19 Era
Debashis Chakraborty (Associate Professor, Indian Institute of Foreign Trade, Kolkata Campus)
While India launched the Look East Policy in 1991 to deepen the economic cooperation with the East and Southeast Asian partners, greater trade relationship with Taiwan has only been a recent phenomenon. Over 2001-19, India’s exports to Taiwan increased from USD 0.37 billion to 1.64 billion, while the corresponding import figures were USD 0.54 and 4.19 billion respectively. The bilateral trade trends are reported in Figure 1, which indicates that India has witnessed a steadily worsening trade deficit againstTaiwan over the period.
India’s widening trade deficit with Taiwan can be understood considering the bilateral trade composition. While the Indian export basket to Taiwan primarily consists of primary (cotton, ores, minerals) and intermediate (chemicals) products, the import basket is intensive in value-added and technology-oriented products (iron and steel, machinery and equipment). It is argued by recent studies that there exists considerable scope to enhance the bilateral trade flows further. Given the recent geo-political set up, Taiwan has been keen to collaborate with India both on trade and investment fronts. India on the other hand, recently has shown stronger resolve to break from the ‘One China’ policy it strictly adhered to for a long time and expand the economic ties with Taiwan. This evolving perspective became amply clear, when India announced last year that the change in investment rules for FDI……(for fulltext, please download AI-16)