New Delhi: 

In an exclusive interview with PTI, Hsu said a trade deal will pave the way for greater investment in India by Taiwanese companies in the semiconductor and other high-technology sectors as it will help to bring down the "high tariff" regime.

Taiwan can help India reduce its import of electronic components from China and the best way to expand the economic engagement would be to firm up a free trade pact, Taiwanese Deputy National Security Adviser Hsu Szu-Chien said on Thursday.

The Taiwanese deputy national security adviser was in the national capital primarily to participate in the Raisina Dialogue, India's flagship conference on geopolitics.

"I think there's great potential for the relations to expand, especially on economic cooperation," Hsu said. The Taiwanese deputy national security advisor said India can bring down its "huge" trade deficit with China by going for joint production of various electronics components instead of importing them from China.

"Most of these are ICT (information and communication technology) products, which from our perspective, India has great potential to produce. And Taiwan can be of help, not only semiconductor but all other ICT products," he said.

"India itself is a huge market and you have a demographic dividend of a very young age of population, which can be put into the workforce." "So with the technology of Taiwan, with the demographic dividends, I do see a very bright future for economic cooperation," he said.

India has a ballooning trade deficit with China as its imports from that country in 2023-24 totalled USD 101.75 billion as against exports of USD 16.65 billion, according to available data.

Major imports from China include electronic components, computer hardware, telecom equipment, chemicals and raw materials for pharmaceutical products.

Hsu said there can be match-making between the technology of Taiwan and India's demographic dividends to produce high-end technology components in India that will help New Delhi cut its imports from China. It is learnt that he also held closed-door meetings with his Indian interlocutors on ways to expand the overall India-Taiwan relations.

"So to have a trade deal will be, from our perspective, mutually beneficial," he said, adding "I hope, given the bright future I just described, I hope there will be renewed momentum from both sides to go ahead." The two sides have already conducted studies for the proposed FTA and held preliminary discussions for the pact.

Leading Taiwanese companies are increasingly looking at relocating their production bases from China to countries in Europe, North America, the US and India in view of Washington's trade dispute with Beijing and the Chinese military's increasing muscle-flexing around Taiwan.

India is Taiwan's 17th largest trading partner and under the "Make in India" policy, the total investment of Taiwanese enterprises in India has exceeded USD 4 billion covering areas from footwear, machinery, and automobile components to petrochemical and ICT products, according to official data.

China considers Taiwan as its breakaway province and insists it should be unified with the mainland, by force if necessary. Taiwan, however, sees itself as completely distinct from China.

Taiwan, a self-ruled island of more than 23 million people, produces close to 70 per cent of the world's semiconductors and over 90 per cent of the most advanced chips that are required for almost all electronic equipment such as smartphones, car components, data centres, fighter jets and AI technologies. The Taiwanese deputy national advisor also said that Taiwan is keen on having a trade pact with India.

Though India and Taiwan do not have formal diplomatic ties, the bilateral trade relations have been on an upswing. In 1995, New Delhi set up the India-Taipei Association (ITA) in Taipei to promote interactions between the two sides and to facilitate business, tourism and cultural exchanges.

India-Taipei Association has also been authorised to provide all consular and passport services. In the same year, Taiwan too established the Taipei Economic and Cultural Centre in Delhi.

Taiwan has a "very strong intent" to have trade negotiations with India, he said. "It has to do with the fact that the tariff is really high. It's really not very good, especially for the medium and small-sized Taiwanese companies, high-tech companies, to come over to invest," he said.

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