Is India “Looking Further East” Beyond China?
~ By Charmaine Mirza
Compete, collaborate and an occasional bout of conflict to spice things up – that sums up the Indo-China relationship rather nicely. But is India’s “Look East” policy taking it to borders beyond China? Apparently so – and it looks like Taiwan and Japan are on it’s immediate radar.
Taiwan’s New South Policy (NSP) has it actively looking at south and south East Asian trade partners that take it beyond the sphere of Chinese influence. India’s economic crescendo has grabbed it’s attention and Taiwanese investment has already made recent landfall on India’s shores.
Japanese investment in India is vintage – but is the growing political partnership between India and Japan old wine in a new bottle?
One of the most aggressive Japanese VCs in India is SoftBank which has made several major investments in the Indian technology sector such as Ola and Flipkart. ReBright Partners, Dentsu Ventures and Mistletoe are just a handful of the other Japanese investors eyeing the Indian startup-scape.
To counter the Chinese influx in Hambantota on Sri Lanka’s south coast, India and Japan have joined hands to help Sri Lanka construct and finance the new Eastern Container Terminal in Colombo. “The news that India has teamed up with another of Asia’s powerhouse economies to offer Sri Lanka a deal regarding another port – a deal that (unlike Hambantota) pointedly leaves overall control in Sri Lankan hands – has inevitably given rise to speculation that India and Japan are motivated by a desire to push back against Chinese influence, and perhaps even to take on Chinese President Xi Jinping’s signature regional infrastructure initiative the Belt and Road Initiative”, according to the SCMP.
Taiwan is looking at a 20 percent year on year increase in bilateral trade. Walter Yeh, President & CEO, TAITRA said that there is big scope for trade to expand between India and Taiwan. “There is no limit to the growth potential. The current trade volume between India and Taiwan is to the tune of US$7 billion. There is a lot of market to scale up further. Taiwan’s trade with China alone is US$160 billion,” he told the Economic Times.
FoxConn has set up a sizeable plants near Chennai and Andhra Pradesh. It has plans to expand in Maharashtra as well. It recently announced that it will be assembling Apple’s latest IPhone in India, which will help Apple to grow it’s India footprint.
Japan and India have a long history of association in the automotive sector. With India making strong moves towards electric vehicles, Japanese companies are gearing up for hybrid and electric vehicles on Indian roads. Basides Honda, Nissan is set to make an aggressive India entry with it’s electric vehicles, starting with the Leaf. Taiwan, on the other hand, is eyeing India’s rapidly growing solar sector – which depends heavily on Chinese technology and equipment at the moment. Taiwanese firms are also bringing their Indian partners into global value chains. Moreover, Taiwan can add value in areas that India is prioritizing, for example, with its technology and techniques in the ICT, healthcare, agriculture, and food processing sectors.
While Japan already has it’s foot in the door in several of these sectors ( in some cases, it has even exited certain ventures that have gone sour such as the Tata Docomo deal in telecom and Ranbaxy-Daiichi Sankyo deal in healthcare) Taiwan is still testing the waters.
But whichever way the wind blows, there’s no doubt that China better watch out — India is definitely looking further east towards new horizons.