Beijing [China], July 31 (ANI): Amid the fallout with China over various issues, Taiwanese firms are pivoting to India drawn by its giant market, inexpensive skilled workforce and generous tax breaks, South China Morning Post reported.
According to a report in South China Morning Post, the firms from Taiwan are seeking to reduce their reliance on mainland China.
The Taiwanese company Pegatron, an assembly partner for the US tech giant Apple, earlier this month announced that it was applying for permits to set up its first plant in India.
The firm, which reported revenue of USD 44.8 billion in 2019, normally offshores its orders to its factories in mainland China.
But analysts and the Taiwanese government said the firm's swing into India is only the latest example of a trend that has been gaining pace over the past four years as ties between New Delhi and Taipei strengthened.
Between 2016 and 2019 two-way trade rose 14 per cent to USD 5.7 billion, according to the Taiwan Bureau of Foreign Trade.
According to the business consultancy Dezan Shira & Associates in New Delhi, investments by Taiwanese firms in India had reached USD 360.5 million by the end of 2018.
About 140 Taiwanese companies are now operating in India, mostly in manufacturing, according to Dezan Shira, which says there has been an upswing of interest over the past four years.
The report said a "charm offensive" by the Prime Minister Narendra Modi government that has included slashing corporate tax rates has added to "India's appeal just as many companies look to diversify supply chains in the wake of the coronavirus pandemic and amid increasing signs of US-China decoupling".
Companies in Taiwan, the world's 22nd largest economy, have historically picked mainland China for offshoring production of electronics and machinery but despite the mainland's proximity, common language and shared culture, costs are rising and the US-China trade war that broke out in 2018 raised tariffs on goods shipped out of China to the United States.
"Because of global impacts from the US-China trade war and the novel coronavirus outbreak, diffusion of risk and allocations is an irreversible trend," the island government's InvesTaiwan office told This Week in Asia.
"Taiwan investors considering India see a huge domestic market and ample labour," the government office added. (ANI)