Taiwan and India signed a memorandum of understanding on April 18 to cooperate in areas such as nanotechnology, semiconductors, aviation and space, satellite development, biotechnology and agriculture. They will also work together to develop programs to commercialise research and development, increase innovation and discuss sustainable development strategies.
Chang Ho-Chung, chief of technology at the Taipei Economic and Cultural Centre in India, told the local media that both parties have long held plans to cooperate in these areas and noted they had already worked together in the fields of genetic research and biochemistry. The centre represents Taiwanese economic and cultural interests in India as there are no formal diplomatic relations between the two countries.
It is hoped the two economies can help each other, especially in terms of information technology. Taiwan has established technology hardware manufacturing capabilities and India has a well-developed software industry.
Taiwan Thinktank, an independent not-for-profit policy research organisation, published a report in December 2006 that said work needs to be done to ensure that cooperation between the two countries is successful. The area of information exchange is considered weak and a key issue in need of improvement. For example, many Taiwanese businesses see bureaucracy in India as a problem. However, the paper said this is not a significant problem at a regional level when interacting with local governments keen to attract overseas investment. The issue is more of a lack of understanding of the regional differences in India. The organisation concluded that many Taiwanese businesses considering investing do not take this into account. The signing of the MOU could help improve information exchange between the two countries.
According to the think tank, India's talent pool is an area that will attract Taiwanese companies to invest in the country. In Chennai alone, each year 40,000 students graduate with engineering-related degrees from highly respected courses, many of which are certified by companies such as Microsoft and IBM. Most of those degrees are in information and electronic engineering. Taiwan Thinktank reports that the labour costs of these graduates are around $360 per month, about a third of the cost of similarly qualified Taiwanese graduates.
India is one of nine countries the Taiwanese government has chosen to increase exports and launched a three-year plan to assist Taiwanese companies in exploring the Indian market. To help the government achieve this, the Taiwan External Trade Development Council (TAITRA) has organized seminars on the Indian market and led large-scale trade missions. It currently has two representative offices in India to further promote Taiwanese products. TAITRA's role is especially important because of the vast geographical differences between Taiwan and India and the fact that Taiwan is made up of small and medium sized enterprises that would find it difficult to promote their products independently.
India is one of the so-called BRIC economies, a term first coined by Goldman Sachs in a 2003 report, that said Brazil, Russia, India and China had the potential to become the largest economies in the world by 2050. According to a United Nations report, published in mid April, India's economy is expected to grow by 9% in 2007.
Taiwan Semiconductor Manufacturing, the island's largest microchip manufacturer, announced in February that it will open an office in Bangalore to enable its customers in India to complete their chip design orders faster. The MOU is expected to provide a framework for increased economic relations and Taiwan business, especially in the information technology sector, as it looks increasingly to India as a viable investment destination.