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China key to Taiwan-India pact

Hackneyed as it may sound, both Taiwanese and Indian officials like to expand IT – as in information and technology – as India and Taiwan.

world Updated: May 31, 2012 01:08 IST

Hackneyed as it may sound, both Taiwanese and Indian officials like to expand IT – as in information and technology – as India and Taiwan. One good reason, according to officials, for doing that is both countries complement each other in the IT field: Taiwan is known for its computer hardware and India for its efficiency in software.

Officials expect that when the feasibility study for the India-Taiwan free trade agreement (FTA) is wrapped up later this year, more such complementing – and not so complementary -- aspects of trade and commerce between the two countries will come under focus.

For Taiwan, the feasibility investigation is being done at the Chung-Hua Institution for Economic Research; in India, the Indian Council for Research on International Economic Relations was given the job. “It would be beneficial for both countries and accelerate trade between the two countries. It has increased in the last five-six years but not reached comfort level,’’ Fu-Kuo Liu, research fellow, at the Institute of International Relations at National Chengchi University told HT.

Trade between the two countries in 2011 was around 7.5 billion USD. But that could increase, agreed, Pradeep Kumar Rawat, the director general of the India-Taipei Association in Taiwan. “The feasibility study is looking at the broad parameters of what kind of economic arrangement could the two countries reach? How it could be expanded? There are 12 broad topics like trade in goods and services, transport and logistics, food processing, retail and of course IT,” Rawat said.

But signing an FTA is a matter of complex negotiations. Not the least because domestic business interests are inter-linked with it. Negotiations both bilateral and internal could easily linger on for three-to-five years.
In the case of an India-Taiwan FTA, China could be the other, big factor. For one, India follows a one-China policy and doesn’t recognise Taiwan diplomatically.

“China might not be happy. Beijing doesn’t mind when we negotiate an FTA with countries (like Singapore and New Zealand) with whom they already have a one,” Fu-Kuo said.

But warming China-Taiwan relations could be a possibly antidote to that. In fact, when Taiwan President Ma Ying-jeou made a two-hour stopover at a Mumbai airport in April this year, Beijing didn’t react; it was interpreted as warming of Beijing-Taipei ties under President Ma. Whether that warm air influences India-Taiwan trade winds remains to be seen.