The US has imposed a 50% tariff on Indian products, which trade analysts say could pressure India's exports and harm its investment climate. The Taiwan External Trade Development Council sees this as a challenge for Indian exporters but an opportunity for foreign firms benefiting from Indian incentives, potentially boosting India's appeal as a manufacturing hub.
Taiwan's growing economic engagement with India reflects its strategic commitment to innovation and partnership, with companies like Delta Electronics illustrating successful long-term investment. TAITRA chairman James Huang emphasized Taiwan's clear vision of co-manufacturing and innovation with India, aiming to build enduring partnerships, talent cultivation, and cultural ties. This strategy includes offering internships, skill exchanges, joint research projects, and supporting startups and SMEs through mentorship, intending to strengthen the value chain linking Taiwan and India.
Taiwan's vision for long-term collaboration with India amid tariff challenges
Trade between Taiwan and India exceeded US$10 billion in 2024, marking a 34% year-on-year increase. Despite this growth, the Indian market presents substantial entry barriers due to high hidden costs and regional diversity in laws, culture, and industry. Huang noted that while market entry is complex, the long-term growth potential is significant for companies that successfully navigate the learning curve. Delta Electronics, which entered India over 20 years ago, is cited as a model for sustained success. Hon Hai Precision Industry (Foxconn) operates manufacturing facilities across seven Indian states, generating approximately 72,000 jobs, and reportedly plans to amplify its investments in India.
TAITRA suggested that, despite the US tariffs diminishing Indian goods' competitiveness in America, US importers will need to identify alternative sources. This shift could benefit Taiwanese firms, particularly those with manufacturing bases in India, who can leverage local production alongside flexible supply chains extending to Taiwan and the US. Such dual resilience could stabilize Taiwan-India operations amid fluctuating trade policies.
Because India's market is fragmented and varied, TAITRA recommends that Taiwanese companies adopt targeted strategies concentrating on specific states or sectors. Tamil Nadu stands out as a key electronics export center, Gujarat leads in green energy development, and Maharashtra is prominent in financial services, smart healthcare, and digital solutions. An initial investment focus on industrial cities like Mumbai, Bangalore, Hyderabad, or Chennai, followed by gradual expansion, is suggested as a pragmatic approach. Collaborations with local partners or joint ventures can mitigate risks linked to tariffs and import restrictions, facilitating integration into India's commercial ecosystem.
The Taiwan Expo promotes cooperation and industrial strengths
TAITRA also underscored the strategic importance of forming joint ventures and alliances with local entities to navigate India's regulatory, labor, and distribution complexities. Regional pilot approaches are gaining traction, exemplified by the southern electronic industry cluster's incremental expansion into other states, which allows companies to adapt progressively to diverse economic and cultural landscapes.
The Taiwan Expo, organized by Taiwan's Ministry of Economic Affairs and executed by TAITRA, serves as a key platform to showcase Taiwan's industrial capabilities abroad. The exhibition aligns with local government policies and market trends and aims to connect Taiwanese firms with buyers through industry forums and product launches. This effort seeks to foster cooperation and promote Taiwan's position in global markets despite the challenges imposed by shifting trade tariffs.
Article translated by Jingyue Hsiao and edited by Joseph Tsai
