EB: What is the vision for the future of Taiwan-Indian trade with respect to the electronics industry?
The demand for home appliances as well as ICT products and services has soared in India with its rapidly expanding economy. The Indian government is eager to develop the hardware market to match the nation’s advances in software. This opens up many opportunities as Taiwan enjoys relative strengths in hardware. This bilateral relationship coupling up of software and hardware could take place in wireless networks, energy (LED, green power), medical electronics (distant healthcare, equipment), and digital (e-governance, virtual classrooms) and auto electronics.
EB: How important is India as a market for Taiwan with relation to the global market?
First, among the BRIC countries, India is the closest except for China. India offers a vast pool of labour, a stable economy and an advanced ICT investment environment. It is the 13th largest export market for Taiwan. India ranks higher than, or has surpassed the UK, Australia, Italy, Canada, France, Brazil and Russia, and has much better trade growth than the other trade partners.
Second, according to a report from Economist Intelligence Unit last March, India’s economy will surpass China by 2018 to become the world’s fastest growing economy. In addition, the World Economic Outlook report by IMF revealed India’s growth rate to be 7 per cent, way above the 2.1 per cent of the developed countries. It ranked India as the world’s second largest market.
Third, India has become an important market for Taiwan. Although Taiwan has entered the Indian market later than the Japanese and Koreans, it has still managed to achieve an incredible high rate of growth—59 per cent in 2007 and 28 per cent in 2008.
Last year, imports declined by 15.8 per cent over the previous year, but with various state projects, they actually grew 26.6 per cent in Q4. The first three months of this year saw exports expand by 33.5 per cent, growing by US$ 765,470 million. It is projected that Taiwan will increase exports to India this year by at least 20 per cent.
Finally, India’s vast market and labour pool offer many prospects. As a result, Taiwan External Trade Development Council (TAITRA) has been organising Electronics Machinery Mold Auto (EMMA) parts Expo India since 2007 in order to enhance Indo-Taiwan business ties and promote greater industry interaction, technology transfer and investment opportunities.
EB: Any recent initiatives to increase business between Taiwan and India, with respect to the electronics industry?
This year, for the very first time, the Indian government sent a delegate led by Rakesh Singh, assistant minister in the Ministry of Information Technology, to Computex Taipei 2010. This mission comprised Indian local officials in charge of the IT sector, and investors and manufacturers in the IT field, who visited several key Taiwanese suppliers to scout for opportunities for future cooperation.
In order to develop the Indian market, TAITRA held the trade show, ‘Sourcing Taiwan 2010’ and invited 16 crucial Indian buyers to purchase various products, such as metal processing machinery, building materials, auto parts as well as bicycles, fitness equipment, consumer electronics and electronic components. The show generated business of $5.67 million.
Furthermore, the Indian government also offers good investment conditions, such as foreign tax credits and rent relief. At the same time, Taiwan’s EMMA Expo India has been acting as a B2B platform to provide opportunities for the Indian and South Asian procurement units to trade directly with outstanding Taiwanese suppliers. Moreover, through this event, we could connect the oversea sources of Taiwanese enterprises with those seeking better investment prospects.
This year, TAITRA will hold EMMA Expo India 2010 from September 8-10, with an expected 250 exhibiting companies. Already there are 147 confirmed companies with 216 booths. The line up includes Philips & Lite-On Digital Solutions Corporation, CMC Motor, TECO, HIWIN Technologies and FEMCO. The show will also feature the ‘most valued product area’ for Indian professional buyers and consumers seeking the best value at reasonable prices. To enhance the value of participating at the show, TAITRA will open up the prospects of India by leading exhibitors to Mumbai, New Delhi and Cochin to observe the local markets and outlets or conditions for investment.
TAITRA will also bring several delegations to India in 2010, such as the ‘Taiwan Construction and Environmental Protection Industry to South Asia’, the ‘Taiwan Renewable Energy Delegation to India’ and the ‘Taiwan Network Communications Industry Delegation to India’.
EB: What key industry sectors (in electronics) offer higher chances of trade growth between Taiwan and India?
There are three key industry sectors—PC and peripherals, 3G mobile equipment and phones and LED, which offer higher chances of growth between India and Taiwan.
Electronic components and finished products are the strength of Taiwanese manufacturers, and can be ideal for tapping the Indian market. The market share of Acer PCs in India in the second half of 2009 was over 10 per cent, next to HP and Dell, and Acer expanded its product line of servers and PCs to meet competitors, headon.
The Indian government auctioned the licences of the 3G spectrum for mobile communication in April and hence increased the 3G business opportunities. HTC Corporation and Bharti Airtel launched the 3G compatible mobile phone, whereas, HTC Smart, provides accessible and easy-to-get-online product to Indian consumers. Inventec, in cooperation with Reliance, launched a CDMA mobile phone. It plans to be more proactive in exploring future prospects in the Indian market.
The applications and market potential of LEDs keep expanding. The markets for illumination and mobile electronics are also growing. There’s huge potential as the optical networks and infrared wireless communication networks keep growing. Taiwan is the major global production base for high brightness LEDs. The global LED industry’s production output is valued at US$ 8 billion and US$ 5 million with a 5 per cent growth rate. Taiwan is ranked No. 2 in the world, next to Japan.
EB: Are there any recent agreements between TAITRA and Indian organisations that promote business with India?
TAITRA has signed MoUs with Federation of Indian Chambers of Commerce and Industry (FICCI) and Confederation of Indian Industry(CII), and is taking all steps to promote trade and economic cooperation between the two countries. These endeavours include dispatching trade missions and exchanging market and economic data. Indian associations help our overseas offices by inviting their members to trade exhibitions or conducting procurement programmes in Taiwan.
EB: What key challenges do Taiwan firms face when trying to tap Indian markets? What support is provided by TAITRA or its Indian partners?
The key challenges Taiwanese firms might face when tapping Indian markets are the cultural and linguistic gaps and the differences in business practices. We suggest that Taiwan exporters wanting to sell to India should find a proper agent or consignee; set a pricing policy according to Indian consumer habits; and develop niche products for Indian markets.