India is in talks with Taiwan over a deal regarding chip production. The new discussions would have both countries enter into a semiconductor manufacturing agreement, bringing a new chip plant to India.
According to a Bloomberg report, the talks are related to chip plant and new trade deal between both nations. However, this move might spark new frictions with China. As per sources close to the matter, the officials from New Delhi and Taipei have met in recent weeks to discuss a possible agreement that would bring a chip plant to India. This chip manufacturing site would have an estimated worth of 7.5 billion US Dollars and would supply the nation with various components related to 5G to even electric cars.
As of right now, India is also surveying potential locations that can provide this site with sufficient water, land, and manpower. Furthermore, the country also seeks to provide financial support of 50 percent of the capital expenditure from 2023. This would also includes other benefits like tax breaks and other incentives as well. Notably, the officials from Taipei also wanted fast progress on a bilateral investment agreement that would include lowered tariffs for various products that are used to make semiconductors.
Unfortunately, the Office of Trade Negotiations in Taiwan declined to comment on the matter while India’s trade ministry has yet to provide a comment regarding this matter. The report added that Taiwan has long sought a trade deal with India, however, official in New Delhi have been reluctant due to rise of new frictions with China caused by this move. For those unaware, China considers the island nation as its territory.
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