India and Taiwan are in talks on an agreement that could bring chip manufacturing to South Asia by the end of the year.
There would be tariff reductions on components for producing semiconductors, a move that may spark fresh tensions with China. Officials in New Delhi and Taipei have met in recent weeks to discuss a deal that would bring a chip plant worth an estimated $7.5 billion to India to supply everything from 5G devices to electric cars, according to sources.
Officials in Taipei wanted quick progress on a bilateral investment agreement that would include tariff reductions on dozens of products used to make semiconductors -- a precursor to a broader trade deal also under consideration.
The discussions have accelerated in recent weeks as U.S. President Joe Biden seeks to shore up supplies of chips, strengthen supply chains among democracies and improve military capabilities in the region.
India has taken a bolder stance against China since a protracted border standoff following violent clashes in 2020 in which at least 20 Indian and four Chinese soldiers were killed. While India and Taiwan are laying the groundwork to discuss a comprehensive trade deal covering goods, services and investments, officials in Taipei are seeking to revise the investment deal to show some early progress.
Chip shortages have delayed the much-anticipated launch of a smartphone by billionaire Mukesh Ambani’s Reliance Industries that has been co-engineered with Google. Taiwan has welcomed cooperation between the two sides on semiconductors although it is still evaluating the proposal given a lack of ecosystem for setting up a chip fabrication plant in India.
Source: ETAuto.com
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