| Introduction: Briefly describe the situation in Taiwan Strait. Body: What are the geopolitical and economic implications of conflict and what measures India can take to mitigate the risks? Conclusion: Conclude with the way forward. |
After the communists’ triumph in 1949, Chinese republicans of the Kuomintang government fled to Taiwan, a small island off the east coast of China, which has since retained the name Republic of China (RoC). Taiwan was formerly known as Formosa. Since its founding in 1949, the People’s Republic of China has believed that Taiwan must be reunified with the mainland, while the RoC has held out as an “independent” country. India does not have formal diplomatic ties with Taiwan, as it follows the One-China policy. Taiwan Strait, just 130 kilometers (80 miles) wide at its narrowest point, is a major international shipping channel and all that lies between self-ruled Taiwan and China.
What are the geopolitical and economic implications for India in Taiwan Strait?
- Trade: India’s 50% of exports is to the east of the Indian Ocean which will be adversely affected because of the crisis. Disruption in sea lines of communication along Malacca Strait will be adversely affected.
- Supply chain impact: Disruption in shipping will negatively impact the supply of raw materials needed for key industries like pharmaceuticals, and electronics which will finally impact our exports in the Western World.
- The safe supply chain for semiconductors: Taiwan is crucial for semiconductor supplies which are widely used in computers 5G smartphones, electric cars, and medical equipment. Disruption will lead to unemployment in these industries and impact services ranging from logistics supply chain to e-commerce.
- Submarine cables: Disruptions of submarine cables could impact the data flow between India and data servers located in the USA.
Steps India can take to mitigate risks:
- Non-alignment: India’s policy of NAM allows India to engage with multiple partners like ASEAN, EU, Japan, and South Korea, which have vital stakes in the Pacific.
- Global South: India should take the lead in engaging Global South or like-minded developing nations to engage with US-China-Taiwan and maintain peace in Taiwan Strait.
- De-risking approach: India should take a cue from the EU and focus on this approach to reduce over-dependency on China for its imports and find new trade partners. India could cooperate with the EU, African Union, Latin America, and small Pacific Island states to find alternative investment destinations.
Conclusion:
The growing rivalry between China and the United States in the Taiwan Strait could have a devastating impact on Indian economic and national security interests. There is an urgent need to assess the impact should the conflict arise and pursue diplomatic efforts to maintain peace and stability in the region.
