By Wu Qiaoxi | 2026-01-12

India and Taiwan, both of which have a rivalry with China, are reaching out to each other.

India's "Act East" policy and Taiwan's "New Southbound Policy" are closely aligned, and their trade has reached a record high. New Delhi appears more willing to widen practical engagement with Taipei.

In recent years, India and Taiwan have expanded exchanges in trade, talent and technology. As Sino-Indian tensions over sovereignty issues persist, India is dialing up cooperation with Taiwan on semiconductors and other high-tech areas, increasingly on a transactional, issue-by-issue basis.

Record India-Taiwan trade

India-Taiwan trade ties keep growing. Data from Taiwan's economy ministry show that India-Taiwan trade hit a record $10.6 billion in 2024 and totaled $10.17 billion in the first 10 months of 2025, up 17.69% from the same period a year earlier.

Meanwhile, in the second half of 2025, governments and companies on both sides have finalized several agreements covering semiconductors and related supply chains. Since February 2024, Taiwanese investment in India has totaled $4.5 billion.

Semiconductors

India views Taiwan as a key semiconductor partner. The two sides have set up a joint master's program in semiconductor technology to link Indian academia with Taiwan's established semiconductor ecosystem, according to the Taipei Times. Exchanges are not limited to the central governments: local authorities, including those of Tamil Nadu state, are also in talks on investment and cooperation.

As global supply chains are reshaped, India and Taiwan are focusing on building "resilient supply chains."

At the Taiwan-India deputy minister-level economic and trade dialogue in December, Cynthia Kiang, Taiwan's deputy economy minister, said India has become a major hub for Taiwanese firms. She said both sides should expand cooperation in talent, the investment climate and policy, pairing Taiwan’s advanced technology with India's deep software talent pool to build more resilient supply chains, according to Central News Agency.

China tries to interfere

The growing India-Taiwan ties have put China on alert. Beijing is trying to weaken Taiwanese companies' confidence in investing in India through propaganda and public opinion efforts, and has warned Taiwanese firms operating in China that major shifts to India could invite retaliation.

In China's view, India deliberately avoids both challenging the one-China principle and denying growing Indian ties with Taipei, Antara Ghosal Singh, a research fellow at the Observer Research Foundation in India, wrote in October.

That stance hinders Beijing's response, but it has several levers it can use to pressure India, including border disputes, economic dependence, its influence in South Asia and India's internal security environment, she added.

India can use Taiwan against China

India's strategic establishment broadly supports using the Taiwan issue to counter China, say some scholars.

Even if New Delhi has not breached any formal red lines with Beijing, its embrace of Taiwan and their newly minted economic partnerships are pushing old self-imposed boundaries, Shanthie Mariet D'Souza, executive director of the Mantraya Institute for Strategic Studies (MISS) in Goa, India, wrote in December for the Lowy Institute.

China has in recent years antagonized India, forcing New Delhi to reconsider its past inaction toward Beijing. Chinese claims on Arunachal Pradesh are of particular concern.

China now treats Arunachal Pradesh as part of its "core interests," alongside Taiwan, the South China Sea and the Japanese-administered Senkaku Islands, the Pentagon said in its 2025 report on China to Congress. China calls those islands the Diaoyus.

Separately, Chinese customs officials detained an Indian citizen born in Arunachal Pradesh for 18 hours at Shanghai Pudong Airport last November. Following the detention, China's Foreign Ministry reaffirmed its claim over her native state, calling it by the Chinese name "Zangnan" (South Tibet).

In response to this and other Chinese behavior, India is spending hundreds of millions of dollars building roads, tunnels and makeshift runways in the Himalayas in case of conflict with China, the Wall Street Journal reported in December.

"With growing Chinese hostility, Indian meekness is beginning to give way to assertive expressions and policies that display its strategic autonomy," wrote D'Souza.