SPRINGER BRIEFS IN ECONOMICS Joe Thomas Karackattu The Economic Partnership Between India and Taiwan in a Post-ECFA Ecosystem SpringerBriefs in Economics For furthervolumes: http://www.springer.com/series/8876 Joe Thomas Karackattu The Economic Partnership Between India and Taiwan in a Post-ECFA Ecosystem 123 Joe ThomasKarackattu Indian CouncilofWorld Affairs (ICWA) New Delhi India ISSN 2191-5504 ISSN 2191-5512 (electronic) ISBN 978-81-322-1277-5 ISBN 978-81-322-1278-2 (eBook) DOI 10.1007/978-81-322-1278-2 SpringerNewDelhiHeidelbergNewYorkDordrechtLondon LibraryofCongressControlNumber:2013936540 (cid:2)TheAuthor(s)2013 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpartof the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation,broadcasting,reproductiononmicrofilmsorinanyotherphysicalway,andtransmissionor informationstorageandretrieval,electronicadaptation,computersoftware,orbysimilarordissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purposeofbeingenteredandexecutedonacomputersystem,forexclusiveusebythepurchaserofthe work. Duplication of this publication or parts thereof is permitted only under the provisions of theCopyright Law of the Publisher’s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the CopyrightClearanceCenter.ViolationsareliabletoprosecutionundertherespectiveCopyrightLaw. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publicationdoesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexempt fromtherelevantprotectivelawsandregulationsandthereforefreeforgeneraluse. While the advice and information in this book are believed to be true and accurate at the date of publication,neithertheauthorsnortheeditorsnorthepublishercanacceptanylegalresponsibilityfor anyerrorsoromissionsthatmaybemade.Thepublishermakesnowarranty,expressorimplied,with respecttothematerialcontainedherein. Printedonacid-freepaper SpringerispartofSpringerScience+BusinessMedia(www.springer.com) To my parents Disclaimer Theviewsandopinionsexpressedinthisstudyarethoseoftheauthor,anddonot necessarily reflect the views of the ICWA. vii Acknowledgments I am indebted to Prof. Tien Hung-Mao [President, Institute for National Policy Research(INPR)Taiwan],Prof.LiuFu-Kuo(ResearchFellowandDivisionHead, InstituteofInternationalRelations,NationalChengchiUniversity),Prof.Jenn-hwan Wang (Director, Center for China Studies, National Chengchi University), Prof. David Huang (Academia Sinica), and Kristy Hsu [Chung-Hua Institution for EconomicResearch(CIER)]fortheirtime,attention,andkindnessduringmystayin Taiwan.IamthankfultoDr.TsaiIng-Wen,formerChairpersonoftheDemocratic ProgressiveParty(DPP),andherofficefortheirinsightfulcommentsonmyman- uscript.IwouldalsoliketothankthefacultyandstudentsatNationalChungCheng University (Chiayi), National Dong Hwa University (Hualien); National Chung Hsing University (Taichung); National Cheng Kung University (Tainan) and InstituteofInternationalRelations(IIR),NationalChengchiUniversity(NCCU)for helpingmelookatIndiafromTaiwan.Ialsobenefitedfromattendingopen-forum talksbyMr.PradeepRawat(DirectorGeneral,India–TaipeiAssociation;15March 2012)andMr.GautamBambawale,JointSecretary(EastAsia),MinistryofExternal Affairs (MEA, India; 20 June 2012) at National Chengchi University, Taipei and Dr.TsaiIng-wen,(talkheldattheIndiaInternationalCenter,20September2012, NewDelhi).Unlessspecificallyattributed,theviewsinthisstudyaremine(asarethe mistakes). Fieldwork for this study was made possible by the Taiwan Fellowship 2012award. At the personal level, I am indebtedtoTiger Lin (Cathay United Bank), Junde Yong (NCCU), Mumin Chen (National Chung Hsing University), Jessie Wang (NCCUVisitingScholarsresidence)andlibrarystaffatIIR(YapingHu,Fanny,Ms. ChenandMs.Lou)fortheirfriendshipandkindnesswhichkeptme‘‘athome’’in Taipei,andtoAnuragElley,JituTamuli,andVarunJampanifornotlettingmefeel ‘‘away from home’’ in Taiwan. I am thankful to Mr. Narendra S. Sisodia (former DirectorGeneral,IDSA)andtoProf.AlkaAcharya(Director,ICS)fortheirsupport, and to Prof. Chin-Peng Chu [Minister, Research, Development and Evaluation Commission (RDEC), Executive Yuan, ROC (Taiwan)] for his kindness to me. I remain grateful to my colleagues at ICWA for their support and encouragement, especiallyAmbRajivBhatia,DirectorGeneralofICWA. I have been fortunate to have received unflinching support from my family. I am grateful to Dad and Mom for their patience, love, and support through the ix x Acknowledgments pages of this study and the travels that took me away from home for this, and to JerlineandAnna(LiuHuan)fortheirunderstandingandlove.Mostimportantly,I thank my Jesus for being with me. June 2013 Joe Thomas Karackattu, Ph.D. Contents 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2 Taiwan’s Political and Economic Ecosystem . . . . . . . . . . . . . . . . . 9 2.1 The Cross-Strait ECFA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 2.2 Anticipated Gains and Problem Areas for Taiwan. . . . . . . . . . . 15 2.3 Taiwan’s Decisive Moment . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.4 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 3 India and Taiwan in a Post-ECFA Ecosystem. . . . . . . . . . . . . . . . 29 3.1 Current State of Relations. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 3.2 Areas of Fitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 3.2.1 Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 3.2.2 Cultural Exchange and Inherent Economic Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 3.3 Policy Realignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 4 Conclusion and Future Directions. . . . . . . . . . . . . . . . . . . . . . . . . 57 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Appendix I: Scope of Coverage of Goods and Services in the ECFA Early Harvest Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Appendix II: Political Attitude Trend Distribution. . . . . . . . . . . . . . . 65 Appendix III: Search Criteria ‘Taiwan’ in commerce.nic.in [Screenshot as on 29 June 2012]. . . . . . . . . . . . . . . . . . 69 xi xii Contents Appendix IV: Search Criteria ‘Taiwan’ in meaindia.nic.in [Screenshot as on 30 June 2012]. . . . . . . . . . . . . . . . . . 71 Appendix V: Annual Plan (IT) 2011–12. . . . . . . . . . . . . . . . . . . . . . . 73 Appendix VI: Procurement Policy Under Government Notification Relating to Electronic Goods . . . . . . . . . . . . . . . . . . . . 75 Appendix VII: Taiwan as Complainant at the WTO. . . . . . . . . . . . . . 77 Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Online Source (Government and Press) . . . . . . . . . . . . . . . . . . . . . . . 83 About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87