How ‘Chip’ Strategy and Technology has transformed ‘Migration & Mobility’ in Asia?

Principle Investigator：Poonam Sharma

India -Taiwan relations have traditionally been low-key because of Indian apprehension about possible reactions from China. But the relationship between India and Taiwan is going through some important if still slow-paced, changes on account of several developments. It appears now that India is set to expand its economic ties with Taiwan significantly. Establishing semiconductor manufacturing hubs has been a matter of priority for India in the last couple of years, and Taiwan is considered a leader in semiconductor manufacturing. India has been keen to bring in as many global players as possible to develop its manufacturing facilities in the country, with the goal of India emerging as “a global hub for electronics manufacturing and design.” All of this provides an opportune moment for India and Taiwan to expand as well as deepen their bilateral engagements, which indirectly could also benefit Taiwan’s political goals and influence within India. Ministerial visits from Taiwan have been a rare event because of China’s opposition to India having any political contact with the island nation, but New Delhi appears to be less concerned about the Chinese reactions in the context of the live conflict on the Sino-Indian border. That India has not mentioned its One China policy publicly in any bilateral documents since 2010 is a reflection of India’s irritation with China. Compelled by several global and regional factors, semiconductor manufacturing will likely emerge as a key area for improving India-Taiwan relations, fostering closer cooperation across several other areas including political and diplomatic engagements.

Today, semiconductors have become a significant geopolitical battleground, with the United States, Japan, and China investing heavily in domestic chip capacity. And, India’s plan to establish itself as a semiconductor manufacturing hub includes attracting overseas chipmakers’ investments to catch up and save on high import costs while bolstering the local smartphone manufacturing industry. As India embarks on this journey, Taiwan emerges as a significant partner, technologically and strategically. A US$20 billion joint venture by Hon Hai Precision Industry and India’s Vedanta to build a semiconductor and display panel fab is already underway, and more partnerships are on the horizon.

In the past few years, several delegations and business groups from Taiwan have visited India and vice versa. Their conversations aimed at bolstering India-Taiwan ties have focused largely on semiconductors. Deemed the “new oil,” semiconductors are at the center of the “chip war.”

Amid the talks on semiconductor ventures and investments, Taiwan and India concluded a memorandum of understanding on Feb. 16 to facilitate the employment of Indian workers in Taiwan, with significance in the migration of labor migrants from India to Taiwan. The bilateral employment mobility deal has been a source of controversy in Taiwan ever since the negotiations accelerated in late 2023.

A small-scale pilot scheme will start first, and if that goes well more Indian workers will be allowed in, the ministry said. It did not say, however, how many workers may eventually come — only that the numbers would be decided by Taiwan. The authorities also said demand for workers in Taiwan for manufacturing, construction, and other industries has continued to expand. While the exchange would also benefit India, by opening employment opportunities for the workers seeking a job in the labor industry and migrating abroad. Although India has no formal ties with Taiwan, this agreement on migration has enabled both nations to socio-economically impact through the dimensions of exchanges and interactions through these labor exchanges.

Therefore, this study will throw an observation on the transforming India-Taiwan relations with the unfolding of this ‘migration’ agreement. Most importantly, it will also analyse China’s reaction on this growing ‘Chip’ friendship.