India, Taiwan holding talks on free-trade
GS Paper - 2 (International Relations)
India and Taiwan have started negotiations for a free-trade agreement and the setting up of a semiconductor manufacturing facility by a Taiwanese firm in India, in a significant step signaling their resolve to broad-base the overall bilateral economic engagement.
- If the move to set up the semiconductor manufacturing plant succeeds, then it will be the second such facility to be set up by a Taiwanese company in a foreign country after a similar hub in the United States.
- The Indian government has already proposed a number of sites for the facility and one of Taiwan's leading semiconductor producers.
- The move to set up the facility comes amid increasing demands for chips in India by automakers and technology companies, among others, when there is a global shortage of chips.
- The government on 15 December 2021 unveiled a plan to provide incentives worth Rs 76,000 crore to encourage the setting up of semiconductor design, manufacturing and display fabrication (fab) units with a larger goal of making India a global electronics production hub.
- India has been promoting its ties with Taiwan in the areas of trade, investment, tourism, culture, education and people-to-people exchanges.
- India does not have formal diplomatic ties with Taiwan but both sides have trade and people-to-people ties.
- In 1995, New Delhi set up the India-Taipei Association (ITA) in Taipei to promote interactions between the two sides and facilitate business, tourism and cultural exchanges.
- The ITA 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.