India moves from China to Taiwan for telecom imports

As relations between the two neighbours remain strained, India seems to be working to reduce its dependence on China for telecom instruments and electronic components by increasing its imports from Taiwan.

During April-February 2022-23, Taiwan’s share in India’s import of telecom instruments jumped to 9 per cent from 2.3 per cent in the same period a year earlier. Though China continued to be India’s major source of high-tech imports, its share declined from 45.8 per cent to 43 per cent during this period.

India’s telecom instrument imports from China increased by just 0.8 per cent, while that from Taiwan jumped 57 per cent. Taiwan’s growing share was significant also because India’s overall telecom instrument imports rose by 7.5 per cent during the period.

Similarly, Taiwan’s share in India’s import of electronic components during April-January doubled to 6 per cent year-on-year, while China’s reduced by almost 14 percentage points to 32.8 per cent.

In value terms, India’s import of electronic components from China during the period contracted 29 per cent to $7.4 billion, while that from Taiwan rose to $1.3 billion.

India’s overall imports from Taiwan during April-February rose by 34 per cent to $7.5 billion. Even as India’s total imports from China grew 6.2 per cent, its share in India’s overall imports declined to 13.8 per cent from 15.5 per cent during the same period a year earlier.

Amid pressure on India’s merchandise exports due to global headwinds, the central government has been focusing on curbing non-essential imports and import substitutions.

India’s growing reliance on Taiwan for high-tech imports may have been fuelled by border tensions with China and frequent supply disruptions. Significantly, the two key import items from Taiwan during April-February were mobile display screens ($949 mn) and monolithic integrated circuits or chips ($853 mn).

However, India has maintained its ‘One China’ policy despite provocations from China, and it has been restrained in its statements on Taiwan. The Ministry of External Affairs told Parliament in February: “The Government of India’s policy on Taiwan is clear and consistent. The government facilitates and promotes interactions in areas of trade, investment, tourism, culture, education and other such people-to-people exchanges.”

The government has also denied India’s engagement with Taiwan for any help in areas related to the roll-out of 5G services. “Taiwanese companies are, however, participating in various programmes launched by the Government of India to boost electronics manufacturing and the semiconductor ecosystem in India. The Government of India facilitates and promotes interactions in areas of trade, investment, tourism, culture, education and other such people-to-people exchanges with Taiwan,” the commerce and industry ministry informed the Rajya Sabha. Business Standard