Taiwanese firms transfer supply chains to India amid growing tension with China: Report

Rising global trade tensions among major economies have prompted this shift.

James Huang, chairman of the Taiwan External Trade Development Council, noted that trade conflicts between the United States and China have significantly increased Taiwan's foreign direct investment (FDI) in India.

In the five years leading up to 2023, Taiwan's FDI in India exceeded $665 million, compared to nearly $277 million during the decade from 2006 to 2017.

Huang stated in an interview on Monday that this compares to Taiwan's FDI of nearly $277 million in India during the decade from 2006 to 2017.

"It is evident that more Taiwanese companies are moving supply chains out of China and are establishing them in India," he added.

Like most countries, India has no formal diplomatic ties with Chinese-claimed Taiwan, but the two have built a close business relationship. India is eager to attract more investment from Taiwan, a major chip-producing nation, to support its manufacturing growth.

China claims Taiwan as its own territory, a claim Taiwan rejects. India also has strained relations with China, particularly over a disputed border, which led to their deadliest clash in decades in 2020.

This year, Taiwan's Powerchip Semiconductor Manufacturing Corp partnered with India's Tata Group to establish the first semiconductor fabrication facility in the western state of Gujarat, leveraging a $10-billion incentive scheme.

"We have programs to bring in Indian students and talents to be trained in Taiwan in semiconductors and that would pave the path for our future co-operation," Huang said.

Huang added that Taiwan's supply chain shift has focused on the mobile telephone assembly and footwear industries.

Two-way trade between India and Taiwan reached $10.1 billion during the fiscal year ending in March 2024.