India, Taiwan consider trade deal; Beijing asks New Delhi to respect 'One China policy'

FP Staff
·6-min read

Amid speculations and buzz over India finalising a trade deal with Taiwan, China has said that it 'firmly opposes' any such deal, asserting that New Delhi should abide by the "one China" policy.

As per reports, there is increasing support within India to start talks on a trade deal with Taiwan as both countries have seen a decline in their respective relations with China.

Taiwan and China have been at odds for a long time with Beijing regarding Taiwan, which lies 160 kilometers off its east coast, as a renegade province. Taiwanese are increasingly asserting an independent identity despite the population's mostly Chinese roots.

India, on the other hand, has been in a border standoff in eastern Ladakh with the Chinese military.

Recently, the US has been pushing countries for international support against Chinese unilateralism, with Donald Trump at its forefront, vowing to make China pay for the 'Wuhan flu', with the outbreak of the coronavirus pandemic.

India has mostly remained cautious about this as it did not want to jeopardise its relations with China, but the recent transgression along the Line of Actual Control has forced New Delhi to rethink its position.

As per Bloomberg, Taiwan has sought trade talks with India for several years, but the Centre led by Prime Minister Narendra Modi has been reluctant to move ahead because it would involve a messy fight with China once any pact is registered at the World Trade Organization, according to a senior government official.

Although there is no official word on an India-Taiwan trade deal yet, the reports have gained currency from the Chinese reaction.

China said it is "firmly opposed" to such a deal asserting that "the one-China principle is the common consensus of the international community including India, and serves as the political foundation for China to develop relations with any country".

Taiwan and its relations

Taiwan, whose more than 23 million people are squeezed onto a mostly mountainous island roughly the size of Maryland, has only 15 diplomatic allies, all smaller nations. However, it issues its own passports, has a foreign minister and maintains its own military and legal system. Economically, it is an important hub in the global high-tech supply chain.

Most of the island's residents are descendants of migrants who began arriving from China's Fujian province in the 1600s, when Taiwan was a Dutch colony.

The emigration flow grew after Taiwan was incorporated into China under the Qing Dynasty later in the 17th century, but Taiwan was not given formal status as a Chinese province until 1885.

A decade later, it was transferred to Japan, which ruled it as a colony until the end of World War II. It then split again from China in 1949 after Chiang Kai-shek relocated his Nationalist government to the island after being driven off the mainland by Mao Zedong's communists.

Aiming to retake power on the mainland, Chiang and his son, Chiang Ching-kuo, maintained martial law on the island until 1987, when the democratic opposition began to gather its strength.

Taiwan-China relations

Talks in 1992 ended the long, formal silence between Taipei and Beijing, but tensions have risen and fallen since then. Fearful that Taiwan was headed for a declaration of formal independence, China lobbed ballistic missiles into the seas north and south of the island ahead of the first fully democratic presidential election in 1996.

The tactic was seen as backfiring badly, with China's bete noire, the pro-independence Lee Teng-hui, winning handily and the US Navy deploying two aircraft carrier battle groups in waters near the island in a demonstration of Washington's determination to follow through on its own legal requirement to consider threats to Taiwan a matter of grave concern.

Beijing claims Taiwan as its own territory, to be annexed by force if it deems necessary. It demands that Taiwan recognize the 1992 consensus that it says recognized Taiwan and the mainland as part of a single Chinese nation, though defined separately as the People's Republic of China or the Republic of China, Taiwan's official name.

The current President of Taiwan, Tsai Ing-wen of the pro-independence Democratic Progressive Party, has refused to do so, maintaining that Beijing has no claim over Taiwan. Her government has repeatedly called for the reopening of talks between the sides, but without this or any other preconditions.

So where does India come into the picture?

With the US pushing countries for a united front against Chinese unilateralism and the recent decline in diplomatic relations between China, India has been pushed to reposition itself.

Earlier this month, India took oblique potshots at China over the guidelines issued by its embassy in New Delhi to the Indian media to not violate New Delhi's 'One-China' policy ahead of the national day of Taiwan, saying there is a "free media" in this country.

The letter was issued in the wake of advertisements issued by the Taiwan government in a couple of leading newspapers in India ahead of Taiwan's national day on 10 October.

"There is a free media in India that reports on issues as it sees fit," External Affairs Ministry Spokesperson Anurag Srivastava said at a media briefing.

Taiwan's President Tsai Ing-wen has also mentioned India's friction with China in her national day speech. She thanked Indians for sending greetings and tweeted a number of posts to showcase her affinity with India, with photographs of her visit to the Taj Mahal and love for Indian food.

In addition to the China factor, Taiwan's economic, technological, and medical advantages serve as catalysts to India. Taiwan was one of the first to offer India key medical equipment during the pandemic.

As per The Tribune, India has sought to woo Taiwanese semiconductor companies while maintaining a subterranean relationship through a trade office where both countries have of late posted well-regarded diplomats. Taiwan can assist in semi-conductor manufacture, which is vital to loosen China's grip on India's electronics and telecom sectors

Moreover, India's ban on Chinese apps and its exclusion of Huawei from its 5G network over security fears also open the door for Taiwan to further deepen its presence in the Indian telecoms industry, as per The Diplomat.

India-Taiwan relations

India does not have formal diplomatic ties with Taiwan. Like most countries, it maintains commercial ties with Taiwan.

In 1995, New Delhi set up the India-Taipei Association (ITA) in Taipei to promote interactions between the two sides and to facilitate business, tourism, and cultural exchanges. The India-Taipei Association has also been authorized to provide all consular and passport services. In the same year, Taiwan too established the Taipei Economic and Cultural Center in Delhi.

In 2018, India and Taiwan signed an updated bilateral investment treaty. Trade has grown substantially from $1 billion in 2000 to $7.5 billion in 2019.

Earlier this month, the Centre gave its approval to firms including Taiwan's Foxconn Technology Group, Wistron Corp, and Pegatron Corp as the government looks to attract investment worth more than Rs 10.5 lakh crore ($143 billion) for smartphone production over five years.

With inputs from The Associated Press

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