A Study of India’s Investment Environment, Major FDI Inflows and Suggestion for Taiwan’s Businessmen

As a part of its Look East Policy, India is trying to increase its economic engagement with East Asian neighbors, including Taiwan. India’s economic ties with Taiwan in trade and investment will help support its growth and development agenda. Unfortunately, the current foreign direct investment (FDI) inflows from Taiwan to India are very low. This study analysed the potential to develop a mutually beneficial relationship addressing the growth imperatives of both countries. The study examined the investment climate in India with respect to Taiwanese business, focusing on select sectors and states. The sectors included information and communication technology, machine tools, retail, transport and logistics, auto and auto components, and food processing. The selected states were Tamil Nadu, Gujarat, Karnataka, Maharashtra, West Bengal, and the National Capital Region (Delhi, Gurgaon, and Noida). Primary and secondary data analysis established the tremendous potential for collaboration between the two countries beyond the sectors and states identified. The process to promote increased collaboration is already underway with representatives from both countries signing agreements to facilitate increased FDI. However, barriers to investment continue to exist and India must expedite the process of domestic reforms to create an attractive environment for Taiwanese investors. Additionally, the study has made specific recommendations for industry associations and businesses at the micro level.