India and Taiwan Forge Economic Ties, Potentially Angering China

India is working towards establishing closer economic relations with Taiwan, with a plan to dispatch a substantial number of workers to the island as early as next month. According to anonymous senior officials familiar with the matter, Taiwan could employ up to 100,000 Indian workers in sectors such as manufacturing, agriculture, and healthcare, under an employment mobility agreement expected to be signed by December.

The motivation behind this partnership lies in Taiwan's aging population, which necessitates an influx of labor, and India's insufficient job growth to absorb the annual influx of young job seekers. However, this move is likely to escalate geopolitical tensions with China, which considers Taiwan a part of its territory and opposes any official exchange. China has been India's primary source of imports for the past two decades and shares a Himalayan border with the country.

The employment pact with Taiwan should not be seen as a shift in India's recognition of the "One China Policy," which acknowledges Taiwan as a part of China. While New Delhi has not explicitly reaffirmed this position publically, it has actively fostered an informal relationship with Taiwan. Negotiations for the India-Taiwan jobs agreement are in their final stages, as confirmed by Arindam Bagchi, a spokesperson for India's Ministry of External Affairs.

Taiwan, with its economy worth $790 billion and an unemployment rate at its lowest since 2000, urgently requires workers to sustain its growth. The Taiwanese government is offering Indian workers remuneration equal to that of locals and insurance benefits—more generous terms than what India has secured in previous agreements. Meanwhile, India, now the world's most populous country, is pursuing employment pacts with developed nations that face an aging workforce.

Since a tense border clash between India and China in 2020, which marked the worst confrontation in four decades, relations between the two nations have remained strained. Both countries have amassed troops and artillery in the Himalayan region. Despite diplomatic talks, progress has been minimal, leading China to release a revised map in August claiming territories currently controlled by India.

This partnership between India and Taiwan comes in the wake of three former Indian military chiefs visiting Taiwan for a security conference, an event that drew objections from Beijing. Additionally, the two countries have an investment promotion pact signed in 2018.

India's government has already entered employment agreements with 13 countries, including Japan, France, and the UK, and is in discussions with the Netherlands, Greece, Denmark, and Switzerland for similar arrangements. In its quest for economic cooperation, India is looking to expand its global partnerships while navigating sensitive geopolitical dynamics in the region.