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India enticing Taiwan business

Posted By F. Michael Maloof On 10/13/2012 @ 1:53 am In Front Page,Money,Politics,World | No Comments

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WASHINGTON – Because of India’s increasing assertiveness in the South China Sea and the tension it is creating with mainland China, New Delhi has decided to increase dramatically its trade ties with Taipei as part of its “Look East” policy initiatives, according to a report from Joseph Farah’s G2 Bulletin.

This policy approach, in effect since the 1990s, has allowed New Delhi to set up so-called cultural centers in Taipei which allow for trade and relations without formal diplomatic recognition.

The renewed economic exchange with India allows Taiwan to diversity its trade relations despite pressure from Beijing on countries to curtail such relations, even thought Taiwan’s trade with China constitutes two-thirds of its overall overseas investments and trade.

India’s economic growth is at a rate higher than that of Japan or the United States at the moment, and that has the effect of encouraging outside investment, such as from Taiwan.

“India, the largest country in South Asia, is also one of the five BRICS (Brazil, Russia, India, China and South Africa),” Anindya Batabyal, a professor at the University of Kalyani in West Bengal, India, wrote in a recent Asia Times article.

“Therefore, Taiwan attaches great importance to its relations with an emerging power like India,” Batabyal said.

Two-way trade went from $930 million in 1995 to $7.5 billion in 2011 between India and Taiwan, as New Delhi’s Look East policy developed.

The trade has focused mostly on information technology and small car production in which India is a major manufacturing center. Both countries also are talking about setting up a Free Trade Agreement.

Taiwan’s increased emphasis on trade with India comes as relations between Taipei and Beijing are the best in years. The two exchange more than $200 billion a year in trade. However, the opening of trade with India will lessen Taiwan’s dependency on the Chinese market, Batabyal asserts.

India’s opening to Taiwan, however, also is being viewed as part of an Indian strategy to challenge China diplomatically.

India has begun to assert itself more in a dispute with mainland China over rival claims in the South China Sea. It has taken the side of regional countries such as Vietnam and the Philippines in their claims against China to maritime resources said to be rich in oil and natural gas and minerals.

China regards the South China Sea as being in its area of influence and disputes claims these countries have made on access to those resources.

Since last year, India-China boundary discussions have been on hold since China had wanted to stop Tibet’s spiritual leader, the Dalai Lama, from addressing the world congregation of Buddhists in New Delhi at the same time.

India also remains upset with China in its stand over strategic issues important to India such as Jammu and Kashmir and Arunachal Pradesh where China claims rights.

“A section of the academic community and national security establishment in India is of the view that India needs to cultivate closer ties with Taiwan in order to counter China’s consistent policy of strategically encircling India through building intimate economic and military ties with countries like Pakistan and Myanmar,” Batabyal said.

India’s new level of assertiveness and leaning toward Taiwan suggest that New Delhi’s relations with Beijing could deteriorate even more.

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