India, following ‘One China’ policy, does not have diplomatic relations with Taiwan. Diplomatic ingenuity, visible since the mid-Nineties, when India opened an office known as India-Taipei Association in Taipei, has led to the flourishing economic and cultural relationship between India and Taiwan.
India is not alone in having commercial, economic and cultural ties with Taiwan. While nearly 23 countries have formal diplomatic relations with Taiwan, several countries have opened offices in Taipei. These countries, which include the United States, western European, Japan, Australia and many others, follow ‘One China’ policy.
Another noteworthy fact is that cross-strait relations between China and Taiwan have been booming since Kuomintang National Party (KMT) came to power in 2008. President Ma, now in his second consecutive term, has initiated a policy of reconciliation on the basis of the so-called ‘1992 consensus’. According to this formulation both sides agree to ‘One China’ policy but refrain from defining what ‘One China’ means. Also, Ma conducts his policy of reconciliation with China on the basis of three NOs: No to independence, No to immediate reunification and No to political talks during his presidency.
China on its part insists on reunification and wants political talks but is happy to go along with Ma’s three NOs. China is following a policy of gradual economic, social and cultural integration with Taiwan while not explicitly ruling out the use of force. The two sides have signed 18 agreements including an Economic Cooperation Framework Agreement (ECFA), which has led to the beginning of cross-strait economic links. Nearly 500 flights per week ply between Taiwan and the main land. The bilateral trade has crossed $150 billion and Taiwanese investments have gone up to $300 billion. Taiwan is contributing greatly to China’s prosperity. It has, however, to be noted that this relationship is fragile and is being conducted under the shadow of 1,400 plus Chinese missiles targeted at Taiwan. China does not want to hear of independence even though there is soft pedalling on the issue of reunification. For China, Taiwan remains its ‘core interest’ and reunification is non-negotiable but no timeline has been set.
The Taiwanese know fully well the might of China. Yet, they are constantly looking for expanding their room for manoeuvre. US support is vital to Taiwan and supplies arms to Taiwan while maintaining a ‘One China’ policy stance. US-China-Taiwan triangle is a delicate one. The Taiwanese have a lurking apprehension whether the US may sacrifice Taiwan on the altar of US-China relations in future.
The Taiwanese negotiate with China all the time but they are in no mood to surrender. Being an economic power house and source of investments and high technology, Taiwan is wooed by many countries. Since the relaxation of relations between China and Taiwan, many countries have deepened their ties with Taiwan. Singapore and New Zealand are exploring the prospects of signing free-trade agreements with Taiwan. Taiwan has also acquired membership of 28 international organisations where statehood is not a membership criterion. It is seeking the membership of 17 more such organisations.
The assertions of sovereignty by China over South China Sea and US’ pivot to Asia policy have led to rise of tensions in the region. The dispute between China and Japan over Senkaku/Diaoyutai islands can potentially escalate. While Taiwan, like China, claims sovereignty over some of the islands in South China Sea and East China Sea, it wants the disputes to be shelved and joint-sharing to be promoted. The Taiwanese are aware that India has interests in South China Sea and are keen to understand the extent of Indian national interests in these regions.
The Taiwanese, taking note of India’s growing influence in regional and global affairs, want to engage with it in the hope that their room for manoeuvre vis-à-vis China will increase. Keenly watching the development of India’s ‘look east’ policy, they want to understand how India defines and protects its interests in Asia. India, which has a delicate and sensitive relationship with China, is naturally careful in dealing with Taiwan.
India has sought to enhance functional linkages with Taiwan without offending China. The bilateral trade between India and Taiwan crossed $8 billion in 2011-’12. Taiwanese investment in India is over $1.2 billion. Nearly 80 Taiwanese companies have presence in India. The Taiwanese are providing teachers for the increasingly popular Chinese language courses in India. The two sides have signed a double-taxation avoidance agreement. A joint study has been launched to explore the possibility of a free-trade agreement between the two sides. Taiwanese companies employ over 10,000 people in their operations in Tamil Nadu.
The Taiwanese are keen to expand their relationship with India further as there is considerable untapped economic and cultural potential. In a significant gesture, Ma made a brief refuelling halt in Mumbai in 2012. This was an unprecedented move on the part of the two sides. The former Indian President Abdul Kalam visited Taiwan in December 2010. A few ministers from Taiwan have also visited India. Track II level contacts have been regular.
India has interests in Asia, particularly, the South China Sea. The Indian integration with ASEAN, South Korea and Japan is deepening. Given large complementarities between India and Taiwan, the latter can be good economic partner for India. India’s software skills and Taiwan’s hardware capabilities can be combined in joint-ventures. Taiwanese companies can invest in Indian infrastructure. Further, Taiwan, which boasts of some high-quality universities, think-thanks, and academic institutes, can be a good source for Indian institutions for academic exchanges. Presently, nearly 500 Indian students are studying in Taiwanese science and engineering universities. Taiwan can help India in strengthening its China study programmes.
There is always an apprehension how China will react to the growing India-Taiwan relationship. Both sides are aware of this factor. However, there is no reason why this relationship should not grow in economic, social and cultural spheres. India is a large country following independent policies. China and numerous other countries have substantial relationships with Taiwan. India can pursue a functional relationship with Taiwan without deviating from its ‘One China’ policy. Its diplomacy is flexible enough to improve ties with Taiwan without hurting its relationship with China.
Arvind Gupta is director general, Institute for Defence Studies and Analyses (IDSA), New Delhi.