Taiwanese companies are eager to finalize a free trade agreement (FTA) with India to enhance business opportunities and semiconductor cooperation, according to James C Huang, chairman of the Taiwan External Trade Development Council (TAITRA). This sentiment was expressed on the sidelines of the Taiwan Expo 2025, where Huang highlighted the desire of the private sector for an FTA to facilitate stronger business partnerships with Indian companies.

Bilateral trade between India and Taiwan has seen significant growth, doubling in the past five years. In the fiscal year 2024-25, it reached $11.78 billion, marking a 16.5% increase from the previous year. This robust trade relationship underscores the potential benefits of a formal trade agreement.

Taiwan's interest in an FTA with India is not new. In 2019, TAITRA Chairman James C F Huang expressed optimism about fast-tracking discussions on a trade deal, particularly after the signing of a bilateral investment promotion agreement the previous year. The focus then, as now, was on increasing Taiwan's share of the Indian tech products and precision tools market.

Echoing this sentiment, Taiwan's Foreign Minister Lin Chia-lung stated that a trade deal would enable both countries to build a comprehensive economic partnership and respond to challenges posed by U.S. tariffs. Deputy Trade Representative Yen Huai-shing suggested that the recent UK-India trade pact could serve as a model for a potential Taiwan-India FTA, boosting cooperation in sectors like semiconductors.

Taiwanese companies are also looking to India to reduce its reliance on China for electronics products. Taiwan is prepared to assist India in this regard, but New Delhi needs to offer more incentives to Taiwanese businesses.

Several Taiwanese firms have already established operations in India, including Foxconn, which is setting up an outsourced semiconductor assembly and testing (OSAT) facility in Jewar, Uttar Pradesh, in collaboration with HCL Technologies. MediaTek, a major integrated circuit design house, also has a substantial presence in India, employing many Indian IC designers. Furthermore, numerous Indian engineers are working at Hsinchu Science Park in Taiwan, and many Indian students have enrolled at National Taiwan University.

Looking ahead, Huang suggested that expanding talent exchanges in the semiconductor industry would be a crucial next step in the B2B partnerships between the two countries. He acknowledged that building a complete semiconductor manufacturing ecosystem takes time but emphasized the immediate potential for talent exchange, given India's wealth of skilled professionals.

Despite the enthusiasm, challenges remain. Taiwan's Minister of Foreign Affairs, Joseph Wu, pointed out that India's administrative structure can be cumbersome, potentially deterring semiconductor investors. He also noted that high tariffs on imported electronics components and inadequate infrastructure need to be addressed. To attract more high-tech companies, Wu stressed the importance of a free trade agreement to facilitate the easy movement of materials, machines, and goods with lower tax rates and tariffs.