India is exploring the possibility of signing a free-trade agreement (FTA) with Taiwan, but does not foresee one with China anytime soon, Indian officials said on Monday.
Gautam Bambawale, joint secretary (East Asia) of the Indian Ministry of External Affairs, said he did not foresee an India-China FTA within the next two years.
“At this stage of economic relations with China, where China has emerged as India’s largest trade partner, where Indian companies still face issues of market access in China, where Indian companies are still dealing with issues of market regulations of licensing in China, I don’t think the time is right for India and China to enter into a free-trade agreement,” he said.
“But a free-trade agreement between India and Taiwan is a possibility,” he said.
India and Taiwan tasked the Chung-hua Institution for Economic Research (CIER) in Taiwan and the Indian Council for Research and International Economic Relations in January with leading the study, Bambawale said.
He said India’s FTA discussions with South Korea took about two years, while those with Japan took about four years and those with Malaysia about one year, he said.
Bambawale told a delegation of Taiwanese reporters that Taiwan and India have signed a bilateral investment promotion and protection agreement and should be able to sign a customs cooperation agreement in the next month or so and a taxation pact in the next two or three months.
Vishnu Prakash, joint secretary (External Publicity) at the ministry, said New Delhi’s decision had nothing to do with the Economic Cooperation Framework Agreement (ECFA) that Taiwan signed with China last year, although India was following the pact closely.
“We take decisions that we want to take … We take decisions in our interest,” he said. “It’s not either or … the Indian Prime Minister [Manmohan Singh] has said it very often ... that the world is large enough … and all countries can be accommodated,” Prakash said.
Bambawale said the ECFA did not have a direct impact on India and Taiwan relations or India and China ties.
“However, as the deal brings China and Taiwan closer together, some of the investment will “obviously flow toward China,” he said.
“We want more Taiwanese -investment in India,” Bambawale said. “I think most Taiwanese businesses, or businesses around the world, don’t want to put all their investments in China. They are looking around for other alternatives to put some of their investments. I think India is a good alternative.”
Commenting on China’s opposition to Taiwan’s efforts to sign FTAs with other countries, Bambawale said whenever China protested, he would reject their protests.
“My stark response to them is as follows: Look, you have had Taiwanese people and Taiwanese industries invest billions of dollars in your country. Why should you protest if they want to invest in my country,” he said. “They have no reply to that.”
Prakash said India was ready to expand economic ties with Taiwan.
“Taiwan is an economic powerhouse. You are a developed country. You have a very strong economy. India and Taiwan compliment each other’s economies, so why not?” he said.
In Taipei, however, the Ministry of Economic Affairs said yesterday that now was not the time to engage in official talks on an FTA with India.
“The feasibility analyses carried out by CIER and by the Indian Council for Research on International Economic Relations are different from government-to-government feasibility studies,” a ministry official said.