India–Taiwan Engagement: Challenges, and Opportunities

Explore the evolving India–Taiwan relationship—covering trade, technology, education, and strategic challenges. Understanding its context, constraints, and future potential, crucial for UPSC Mains, Essay & IR topics.

In the landscape of Asian geopolitics, the relationship between India and Taiwan is often overlooked, yet it is quietly becoming a pillar of pragmatic partnership and strategic calculation. As Harsh V. Pant and Suyash Desai observe, “As India and Taiwan complete 30 years of informal relations this year, there is scope to deepen cooperation in the domains of trade, technology, digitalisation, and security” (ORF, July 29, 2025) The dual-track engagement—proactive engagement and soft balancing with geo-economic tools—has built a pragmatic foundation for the long-term India-Taiwan partnership. However, this relationship confronts systemic pressures and material constraints that constrain the partnership’s pace, depth, and visibility in sensitive domains.  This essay explores the context, evolution, challenges, and future possibilities of India–Taiwan relations, drawing on recent scholarship and key policy documents.

India -Taiwan relation : An Unusual Partnership

India and Taiwan share a relationship shaped by geography, ideology, and great power politics. India, with its massive population and growing economy, is South Asia’s anchor, while Taiwan is a vibrant democracy and a global leader in technology, especially semiconductors. The catch is, their relations are unofficial: India, like most countries, does not formally recognise Taiwan due to its adherence to the “One China” policy, which regards Taiwan as part of China.

This has led both to operate economic and cultural centres instead of embassies and to limit high-profile political exchanges. Yet, beneath this cautious façade, ties have gradually but steadily grown, particularly over the past three decades, reflecting shared concerns about China’s regional dominance and a desire for diversification in trade, investment, and technology partnerships.

The Growth of Cooperation: Pillars and Examples

Despite formal constraints, India and Taiwan have built a partnership that touches many sectors:

• Trade and Technology: Bilateral trade has surpassed US$8 billion. Indian and Taiwanese companies are increasingly cooperating in electronics, renewable energy, robotics, and biotechnology. For example, Gogoro (Taiwan) and Belrise Industries (India) are investing US$2.5 billion in electric vehicle infrastructure, and both sides are exploring collaborations in solar power and semiconductors. Taiwan’s semiconductor prowess is particularly valuable to India’s “Make in India” ambitions.
• Education and Research: Joint research projects in artificial intelligence, green energy, and life sciences are ongoing, with the Taiwan Education Centre at IIT Guwahati and academic fairs strengthening educational ties.
• Start-up Ecosystem: Initiatives like the India–Taiwan Startup Bridge are linking start-ups, investors, and incubators from both countries, fostering entrepreneurship and innovation .
• Soft Power and Cultural Exchange: While still nascent, there is growing exchange of students, language teachers, and cultural programmes, with more Indian students now studying in Taiwan and interest in Mandarin rising in India.
• Security and Digital Cooperation: While official defence ties are limited, both sides are sharing best practices in cyber security, countering disinformation, and digital innovation.

Challenges: Systemic Pressures and Material Constraints

However, the partnership is far from smooth. Its potential is curbed by both external and internal factors. As Pant and Desai (2025), “Within the dual-track framework, structural realism and asymmetric interdependence theory suggest that systemic pressures and material constraints inhibit India-Taiwan cooperation from materialising fully.” Additionally, strategic caution due to the anarchic system and power differentials reinforces these limitations. As a result, the pace, depth, and visibility of strategic cooperation, especially in sensitive domains.

Key Barriers Include:

1. The China Factor: China’s economic clout and assertive diplomacy mean that any overt deepening of India–Taiwan ties risks antagonising Beijing. India must constantly calibrate its outreach to Taiwan so as not to provoke China, especially given its own border disputes.
2. Absence of Formal Diplomatic Relations: The lack of embassies and formal agreements means that government-to-government ties are necessarily limited and often lack legal or institutional backing.
3. Asymmetric Capabilities: While Taiwan is a technological powerhouse, India’s economy is far larger. This asymmetry requires careful balancing to ensure mutual benefit without inflated expectations.
4. Limited Public Awareness: Public understanding of each other’s society, economy, and culture is weak on both sides. As Pant and Desai (2025) note, “Taiwan views India through outdated stereotypes … Many Taiwanese people, if not all, still associate India with poverty, overpopulation, or spirituality—while remaining unaware of its recent technological advancements, booming start-up ecosystem, thriving economy, and growing geopolitical influence on the world stage” .
5. Economic Gaps: Taiwan’s economy is highly developed and export-driven, while India is still growing its industrial base. This sometimes leads to trade imbalances or differing expectations on investment.
6. Political and Bureaucratic Hurdles: Both countries face their own domestic challenges—regulatory uncertainty in India and limited diplomatic resources in Taiwan—which slow down policy innovation.

Systemic and Structural Hurdles

Systemic pressures are particularly significant. The “One China” policy is not just a diplomatic doctrine but a global norm, enforced by Chinese economic leverage. Moreover, Taiwan itself is internally divided on how far to pursue outreach to India, as the island’s political parties have different priorities and historical baggage regarding relations with China.

For India, domestic issues—such as bureaucratic inertia, limited reforms, and a slow judicial process—also play a part. As Pant and Desai (2025) point out, “India’s general domestic problems—such as bureaucratic inertia, limited labour and land reforms, regulatory uncertainty, and a slow judicial process—coupled with Taiwan-specific limitations like limited fiscal space, infrastructure deficiencies, and challenges in attracting foreign investment for the semiconductor fabrication industry, may hinder the full realisation of this relationship” .

Pragmatic Engagement: What Works

Despite all these barriers, the India–Taiwan relationship is a case study in pragmatic, incremental engagement. Rather than chase symbolic gestures, both sides focus on what is feasible and mutually beneficial. Examples include:

• The establishment of joint research centres in AI and machine learning between leading Indian and Taiwanese universities.
• Significant investments by Taiwanese firms in India’s manufacturing, especially in electronics and smartphone production.
• Policy frameworks such as India’s “China+1” strategy, which seeks to attract supply chains away from China—here, Taiwan is an ideal partner.

Moreover, academic and people-to-people exchanges are being institutionalised, with both countries looking to increase the flow of students, teachers, and scholars.

Opportunities: The Road Ahead

As the global order shifts, opportunities for deeper India–Taiwan cooperation are expanding, particularly in:

• Semiconductors and Technology: With India aiming to become a global electronics hub, partnerships with Taiwan in chip manufacturing are growing. Tata Electronics’ alliance with Powerchip Semiconductor (Taiwan) to set up a fabrication plant in Gujarat is a landmark step .
• Green Energy and Health: Collaboration in solar energy, electric vehicles, and pandemic prevention systems can help both economies diversify and future-proof.
• Education and Talent: Taiwan can benefit from India’s vast pool of STEM talent, while India can learn from Taiwan’s innovation systems.
• Strategic Dialogue: Quiet cooperation on security—such as information-sharing, cyber defence, and counter-disinformation—will likely increase, especially as regional uncertainties persist.

Forward-Looking Policy Recommendations

Quoting directly from Pant and Desai, this essay recommends that “India pursue a soft-hedging strategy that leverages asymmetric economic interdependence with Taiwan while preserving its strategic ambiguity. Put simply, this strategy maximises economic and limited strategic gains without triggering a systemic backlash from the dominant power—China. By continuing to adopt this framework of calibrated soft balancing through geo-economic and technological engagement with Taiwan, India can enhance its strategic space while mitigating escalation risks inherent in an anarchic and power-asymmetric system.”

To translate this into actionable steps, both sides should:

1. Institutionalise functional cooperation in key sectors such as semiconductors, education, and digital economy via MoUs and think-tank dialogues.
2. Enhance strategic ambiguity, maintaining formal support for the One China policy but maximising unofficial exchanges.
3. Integrate Taiwanese firms into Indian supply chains, leveraging the “China+1” strategy.
4. Invest in cyber and information security jointly to resist Chinese pressure.
5. Promote multilateral linkages via forums like the GCTF and Quad.
6. Facilitate greater academic and youth exchanges to build a more knowledgeable and supportive constituency on both sides.
7. Push for more visible success stories in areas like smart manufacturing, clean tech, and healthcare.

Conclusion

The India–Taiwan relationship, built in the shadow of great power competition and systemic constraints, is a model of quiet, pragmatic engagement. Though challenges remain—especially regarding China’s sensitivities and domestic limitations—there is growing potential for meaningful, mutually beneficial cooperation. By focusing on trade, technology, education, and soft power, while remaining strategically ambiguous, India and Taiwan are quietly forging a partnership that can serve as a model for other middle powers navigating the complexities of a multipolar Asia.

As the relationship evolves, its success will depend not only on governmental decisions but also on how well both societies can learn about and from each other—building a partnership that is as much about people and ideas as it is about strategy and policy.

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The Source’s Authority and Ownership of the Article is Claimed By THE STUDY IAS BY MANIKANT SINGH