Center in talks with Taiwan over chip factory, tariff reduction

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  • Officials from New Delhi and Taipei have met in recent weeks to discuss a deal that would bring an estimated $ 7.5 billion chip factory to India to supply everything from 5G devices to electric cars, residents said.

Bloomberg | , Bombay

POSTED ON SEPTEMBER 28, 2021 1:36 AM IST

The government and Taiwan are in talks on a deal that could bring chip manufacturing to South Asia as well as tariff cuts on components for semiconductor production by the end of the year, said officials. people familiar with the matter, a decision that could trigger new tensions with China. .

Officials from New Delhi and Taipei have met in recent weeks to discuss a deal that would bring an estimated $ 7.5 billion chip factory to India to supply everything from 5G devices to electric cars, residents said.

The government is currently exploring possible locations with adequate land, water and manpower, while saying it will provide financial support of 50% of capital spending from 2023 along with reliefs. tax and other incentives, residents said.

Taipei officials wanted swift progress on a bilateral investment deal that would include tariff cuts on dozens of products used to make semiconductors – a precursor to a broader trade deal also under consideration, said the inhabitants.

The people asked not to be identified to discuss the negotiations that were currently underway. The Taiwanese cabinet’s Trade Negotiations Office declined to comment, while a spokesperson for India’s Ministry of Commerce did not immediately respond to a text message.

The trade talks come at a time when democracies around the world are strengthening their economic and military ties to stand up against an increasingly assertive China.

While Taiwan has long sought a trade deal with India, New Delhi officials were reluctant to anger Beijing, which claims island democracy as its home ground.

Discussions have gathered pace in recent weeks as US President Joe Biden seeks to consolidate chip supply, strengthen supply chains between democracies and improve military capabilities in the region.

India has also taken a bolder stance against China from a long border standoff following violent clashes in 2020 in which at least 20 Indian soldiers and four Chinese soldiers were killed.

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