India-Taiwan Supply Chain Collaboration: Progress and Challenges Ahead

31 Jul, 2024

India-Taiwan Supply Chain Collaboration: Progress and Challenges Ahead

In 2019, TSMC founder Morris Chang highlighted the geopolitical significance of Taiwan's semiconductor industry amid the escalating tech war between the US and China. With semiconductors becoming a strategic national industry, Taiwan's close ties with the US enhance its trustworthiness, distinguishing it from competitors like Japan and South Korea. Despite Taiwan’s technological advantages, India struggles with seamless cooperation due to its perception of Taiwan as a US ally and its own geopolitical relationships. India’s focus on existing partnerships and its Act East Policy have not effectively integrated Taiwan into its supply chain strategy.

Geopolitical factors, including the Ukraine war and the Gaza conflict, have not accelerated the expected shift of supply chains from China to India. The US views India's actions, such as purchasing energy from Russia and strengthening ties with France, with suspicion. Taiwan, under President Lai Ching-te, has redefined its role in the Indo-Pacific framework, with a new AI innovation hub attracting global investments. This underscores Taiwan's strategic importance in advanced technology. Despite India’s growing economic power, its collaboration with Taiwan in the semiconductor supply chain remains underdeveloped, affecting its position in the Indo-Pacific region.

India's challenge lies in aligning with advanced technology partners and integrating Taiwan's semiconductor capabilities effectively to realize its economic ambitions.