Taiwan Firms Shift Supply Chains To India From China: Report

Taiwan firms are shifting supply chains to India from China, as Taipei and New Delhi strengthen economic ties, the head of the island's key trade body told Reuters, as global trade tension rises among major economies.

Trade conflict between the United States and China drove up Taiwan's foreign direct investment (FDI) in India to more than USD 665 million in the five years to 2023, said James Huang, chairman of the Taiwan External Trade Development Council.

That compared with democratically-ruled Taiwan's FDI of nearly USD 277 million in India during the decade from 2006 to 2017, Huang said in an interview on Monday.

"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 ties with Chinese-claimed Taiwan, but the two have established a close business relationship, with India keen on more investment from the major chip-producing nation to aid its efforts to boost manufacturing.

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

Taiwan's Powerchip Semiconductor Manufacturing Corp partnered this year with India's Tata Group to build the first semiconductor fabrication facility in western Gujarat state, relying on a USD 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 cooperation," Huang said.

Taiwan's supply chain shift has focused on mobile telephone assembly industries and footwear, he added.

Two-way trade between India and Taiwan stood at USD 10.1 billion during the fiscal year ending in March 2024.