India Taiwan Free Trade Agreement

The India-Taiwan Free Trade Agreement: An Opportunity for Economic Growth

The India-Taiwan Free Trade Agreement (FTA) has been in talks for several years now. The negotiations gained momentum in 2017 after India and Taiwan signed the bilateral investment agreement in 2018. There has been a lot of buzz around the proposed FTA, with advocates emphasizing the potential benefits for both economies. In this article, we`ll take a closer look at what the FTA could mean for India and Taiwan.


India and Taiwan have long-standing economic ties that have been mostly restricted to trade in goods. In recent years, there has been an increasing demand from Taiwanese companies for investment opportunities in India. Conversely, India also sees an investment potential in Taiwan, particularly in the information technology (IT) sector.

The India-Taiwan FTA aims to enhance these economic ties and increase bilateral trade and investment between the two nations. The agreement is expected to cover trade in goods, services, and investment, among other areas.

Benefits for India

For India, the FTA with Taiwan presents a significant opportunity to diversify its export markets and reduce its dependence on China. Currently, China is India`s largest trading partner, but the ongoing geopolitical tensions between the two nations have led Indian businesses to explore new markets. Taiwan, on the other hand, is a major trading partner for several other countries and is known for its high-tech industries, which make it attractive to trade with.

The FTA could also lead to increased investment from Taiwanese companies in India. Several Taiwanese electronics manufacturers and IT companies have already established a presence in India, and the FTA could pave the way for more.

Benefits for Taiwan

For Taiwan, the FTA with India could mean a greater market for its exports. India is the world`s second-most populous country and presents a huge potential market for Taiwanese goods. The agreement could also make it easier for Taiwanese companies to invest in India, specifically in sectors such as IT, biotech, and renewable energy.

Moreover, the FTA could serve as a strategic move for Taiwan to strengthen its ties with India. India is seen as a potential ally for Taiwan in the region, with both countries sharing concerns about China`s rising influence.


Of course, there are challenges that come with any FTA. One of the main challenges is negotiating the terms of the agreement. Both India and Taiwan have their priorities and will need to find a common ground that benefits both economies.

Another challenge is sensitivities related to the political status of Taiwan. India recognizes the “One China” policy, which means that it recognizes the People`s Republic of China as the only legitimate government of China, including Taiwan. This could create complications during the negotiations, and both countries will need to navigate these sensitivities carefully.


The India-Taiwan FTA has the potential to usher in a new era of economic growth for both nations. By lowering trade barriers and increasing bilateral trade and investment, the FTA could create new opportunities for businesses in both countries. However, reaching an agreement will not be easy, and both nations will need to negotiate the terms carefully while addressing the challenges. Nonetheless, if the FTA goes through, it could prove to be a significant development for both economies.