Companies in Taiwan Looking to Shift Production Base to India

In response to escalating tensions with Beijing, prominent Taiwanese companies are exploring the possibility of relocating their manufacturing operations to India. Policymakers in Taiwan have revealed that this move aims to mitigate their exposure to the Chinese market and diversify their global supply chains. The decision comes amidst growing geopolitical challenges faced by the island nation.

Exploring Collabs

Kao Shien-Quey, the Deputy Minister for Taiwan’s National Development, highlighted the vast potential for collaboration between Taipei and New Delhi in emerging and critical technology sectors. Specifically, Shien-Quey emphasised opportunities for semiconductor manufacturing and production of electronics equipment. During an interaction with international journalists in Taipei on July 2, he emphasised that leading Taiwanese tech giants are considering India as a strategic destination to enhance their supply chains worldwide.

Kristy Tsun-tzu Hsu, director at the ASEAN Studies Center (Taiwan), emphasised India’s significance for Taiwan. Hsu also spoke about how Taiwanese companies functioning from China are perusing the idea of “decoupling” from the country’s global supply chain without affecting their domestic consumer base. Hsu also acknowledged India as an essential country for Taiwanese enterprises, expressing the belief that India could play a crucial role in their diversification strategy.

Why the Shift?

Taiwanese companies have been increasingly inclined to relocate their production bases from China to various regions, including Europe, North America, the United States, and now India. This strategic shift comes as a response to heightened trade tensions between China and the United States, as well as China’s escalating military activities around Taiwan.

The decision to consider India as a manufacturing base aligns with Taiwan’s objective to reduce dependence on China and enhance the resilience of its supply chains. By diversifying their manufacturing locations, Taiwanese companies aim to mitigate risks associated with geopolitical uncertainties and ensure the continuity of their operations.

Relocating production bases to India offers multiple advantages for Taiwanese firms. India boasts a skilled workforce, a robust domestic market, and a growing focus on innovation and technology. Furthermore, India’s strategic location provides access to other key markets in South Asia and the Middle East, offering Taiwanese companies an opportunity to expand their regional presence and diversify their customer base.

As Taiwanese companies explore potential collaborations and partnerships with Indian counterparts, both countries stand to benefit from the transfer of technology, knowledge exchange, and economic growth. This trend could strengthen bilateral ties and contribute to the economic development of both nations.