There is a huge potential for further economic cooperation between Taiwan and India, after its new government led by Indian Prime Minister Narendra Modi announced its intentions to attract foreign investment to revamp the nation’s slumping economy, Yuanta Investment Consulting Co (元大投顧) said last week.
In addition, an economic cooperation agreement (ECA) similar to a free-trade agreement with India, which is intended to lower or remove bilateral tariffs and other trade barriers, would be a strong incentive for Taiwanese exporters and investors to tap into the South Asian country’s market, Yuanta said in a research report issued on Friday.
The report came after the Bureau of Foreign Trade said earlier in the week that Taiwan is to send an economic and trade delegation to India in September to encourage two-way investment, and Taipei is to host a Taiwan-India investment forum in October.
In a statement posted on its Web site on Thursday, the bureau said it signed a renewed memorandum of understanding with Standard Chartered PLC on June 11, as Taiwan plans to continue relying on the UK lender’s regional resources to help foster its bilateral trade with India.
India ranks 20th among Taiwan’s trading partners, the bureau said.
Modi’s Bharatiya Janata Party won a historic election victory last month largely because of his promise to boost economic growth in India, with a plan to shape the nation into a global manufacturing hub.
As a result, Modi and his government are expected to speed up the review process for major commercial projects, encourage private investment in the coal and defense sectors, establish industrial zones and provide incentives to accelerate the development of labor-intensive manufacturing in Asia’s third-largest economy, Yuanta researcher Wendy Kuo (郭香妏) said.
However, the implementation of policies will be the key to investment and consumption growth, she said.
Bilateral trade between Taiwan and India totaled US$6.17 billion last year, growing by more than 400 percent from US$1.2 billion in 2000 and represented an increase of 556 percent from US$940 million in 1995, when the two countries first set up representative offices to deal with trade and cultural exchanges, the bureau’s statistics showed.
However, the nation’s foreign direct investment (FDI) in India remains relatively minor, ranking the 41st-largest as of the first quarter of last year, according to tallies compiled by the Department of Commerce in India.
Between 2000 and March last year, Taiwan invested US$65.7 million in India, accounting for 0.03 percent of India’s total foreign investment during the period, statistics showed.
Since Taiwan has been seeking trade ties in South Asia in recent years, India is likely to be a close economic and investment partner, Kuo said.
“India and Taiwan have agreed to form a task force to facilitate the Taiwan-India economic cooperation agreement,” she said, adding that the upcoming investment forum in October would mark the first step toward signing the ECA.
Kuo said the industries that Taiwanese companies have invested in India have been similar to those invested in within China.
“As the China market is stabilizing or even facing saturation, we believe Taiwanese companies will expand globally, with India a starting point given its huge market and low labor costs,” she said.
Taiwanese investment in India is mainly focused on information and communications technology, machinery, transportation, engineering, metal manufacturing and shoemaking, as well as the agriculture and fishery sectors.
Based on Yuanta’s research, the manufacturing segment currently accounts for just 15 percent of India’s GDP, lower than China’s 30 percent, because of the country’s lagging infrastructure development, slow-moving bureaucratic system and high interest rates that hinder business investment.
India’s economy grew 4.6 percent in the first quarter of the year from a year earlier.
Yuanta forecast India’s GDP would grow by about 5.5 percent this year and 6.5 percent next year.
CONSIDERATIONS: The NSTC instructed the park to assist laid-off workers and urge companies to use furlough programs to ease the effects of falling demand Firms in the Hsinchu Science Park (新竹科學園區), which houses major tech companies, reported laying off 496 employees last month amid weakened global demand, Hsinchu Science Park Bureau director-general Wayne Wang (王永壯) said yesterday. Wang told a news conference that 48 companies in the science park laid off employees last month, including one hard disk supplier which let go 241 employees as part of a plant closure due to falling demand. Other companies reported sporadic layoffs as they adjusted to weakening demand, he said. Wang made the remarks after local media reported the layoffs over the weekend. Although the global economy is struggling with high
DEJA VU: Echoing the probe into real-estate giant Evergrande Group, the bank is under Beijing police scrutiny after last week, telling investors it is ‘severely insolvent’ Chinese authorities said they recently opened criminal investigations into Zhongzhi Enterprise Group Co’s (中植企業) money management business, days after the embattled shadow banking giant revealed a shortfall of US$36.4 billion in its balance sheet. Police in Beijing said in a statement on WeChat that they took “criminal mandatory measures” against multiple suspects, identifying one by their last name, Xie (解). They urged investors to report cases or provide leads to the authorities, including filing complaints online. Xie Zhikun (解直錕), the group’s founder, died in 2021, but several of his relatives are executives at the company. The statement did not elaborate on what
German Chancellor Olaf Scholz and German Minister for Economic Affairs and Climate Action Robert Habeck have promised to solve investment subsidy issues for Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Intel Corp, despite the country’s budget woes. Uncertainty over the funding to TSMC and Intel has arisen after a ruling by the German Federal Constitutional Court, which cast doubt over subsidies for construction of local semiconductor chip plants. On Nov. 15, the court ruled that the German government’s decision last year to reallocate 60 billion euros (US$65.74 billion) of unused funding from COVID-19 pandemic support measures to its Climate and Transformation Fund
NEW TREAD: The Taiwanese shoe brand paired with TSMC to turn silicon waste into a circular economy good, following its success making shoes from coffee grounds Ccilu International Inc (馳綠國際), a Taiwan-based footwear brand, has become the first company in the world to turn silicon waste from contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) into eco-friendly shoes. Last year, the global footwear industry saw the first pair of pressure-relief slippers made from recycled silicon waste by Ccilu. The brand continued to unveil follow-up collections, including sports shoes and massage slippers made from the same materials. In an interview with CNA, Ccilu CEO Wilson Hsu (許佳鳴) recalled the company’s innovation of the first pair of slippers made from silicon waste after its silicon waste treatment partner, Semisils Applied Materials
RSS