India, Taiwan talk computer chip manufacturing |
India and Taiwan are in talks on an agreement that could bring chip manufacturing to South Asia along with tariff reductions on components for producing semiconductors by the end of 2021. This 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 for everything from 5G devices to electric cars. India is currently studying possible locations with adequate land, water, and manpower. Indian government could provide support worth 50% of capital expenditure from 2023 as well as tax breaks and other incentives. 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 trade talks are significant at a time when democracies across the world are boosting economic and military links to stand up against an increasingly assertive China. While Taiwan has long sought a trade deal with India, officials in New Delhi had been hesitant as China claims the island democracy as its territory. The talks have accelerated in recent weeks as US President Joe Biden seeks to shore up supplies of chips, strengthen supply chains among democracies and improve military capabilities in the region.
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