India and Taiwan have been discussing a free trade agreement and the establishment of a semiconductor manufacturing cluster in the nation, in an attempt to address the rising demand for chips needed for items ranging from cellphones to cars.
According to people familiar with the situation, the two sides formed four groups earlier this year to focus on developing a semiconductor manufacturing hub, education and training of highly specialised manpower needed for the industry, a bilateral investment agreement, and a free trade agreement.
The discussions on these matters gathered momentum by the middle of this year, and the group on semiconductor met twice virtually, in August and September, while the planned trade treaty was only discussed once, according to the source.
Both parties are interested in Taiwan’s semiconductor giants, such as Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC), establishing a factory in India. According to the sources, the Indian side has proposed numerous locations for the hub, but the two sides have yet to make a final decision.
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