NEW DELHI: The amended Motor Vehicles Act is reminding Indians of the rules of the road that they have long forgotten or ignored. Taiwan is reminding India of the rules of the game, meaning business. If you want to do business and draw Taiwanese investment into the country, rules that are stable and long term are important.
This is because there is a “perception gap with regard to India,” said Shih Chung Liu, Vice Chairman of the Taiwan External Trade Development Council (Taitra). On his second visit to India which included swings through Bengaluru, Punjab and Haryana, Liu pointed out that “lack of information is the main thing. Taiwan firms don’t have enough information about India”.
Add to that some familiar and long-standing problems. “It’s difficult to do business because of government policies, infrastructure, inadequate power and so on,” said Liu. India ranks 77 in the ease of doing business list, which is a huge leap from 100 but not as good as Taiwan’s 11th ranking. Nevertheless, under the two year old “Southbound Policy” of looking beyond China, India figures on Taiwan’s list of “Tier 1” countries (that includes the ASEAN 10) where investments can be channelled.
Some success has already been chalked up with 120 Taiwanese firms expected to invest in a 70-acre site near Bengaluru airport for an IT cluster. The $100 million deposit has been made and operations are likely to begin in 2021.
In the last few months, representatives of scores of Taiwanese firms have come to India scouting for investment opportunities and, more important, local partners that can guide them through the labyrinth of bureaucracy and red tape at the Centre and the states. TAITRA is helping through its four India offices and has been able to “match 30 Taiwanese firms with Indian companies”.
The push for India is not driven by altruism. With “two big elephants fighting”, the Taiwanese believe relations between the U.S. and China will never be the same again. As Liu put it: “Businessmen want a stable environment and even if there is a trade deal (between the U.S. and China), businessmen will think twice about putting their money in China”.
Therefore, the estimated 10,000 Taiwanese firms in China (already under pressure over rising wages and environmental regulations) are being advised to move to greener pastures. Around 130 Taiwanese firms are planning to return home while many others went to Vietnam because it is on China’s doorstep. But doubts are growing about Vietnam’s capacity to accommodate any more. This is where India emerges as the investment destination over the next 30 years.
After closely studying the Indian business and tech environment, TAITRA is focusing its India strategy on a clutch of “new economy” sectors. “Smart cities, E-vehicles, renewable energy are the area of focus. Also petrochemicals since India will continue to be dependent on fossil fuels for the foreseeable future. Liu pointed to some other sectors where Taiwan had strengths: “Smart machinery for food processing, biochemicals, startups and defence”.
“India is a new country for us,” said Liu, pointing out that Taiwanese firms would require handholding. Perhaps, the initial way forward would be through trade before investment in factories in India starts to take off. But the die is cast. All that is required is for India to up its game.