In a significant development for Taiwan-India economic relations, the Allegiance Group has signed a major project cooperation agreement with the government of Telangana state in India to establish the first "I.T.I.P" Taiwanese industrial zone within the state's "Future City"(Net Zero City) project.
The initiative aims to gather Taiwanese foreign direct investments, with multiple companies already signing letters of intent for investment. This strategic shift reflects growing geopolitical concerns, with Taiwanese companies gaining unprecedented governmental support in India through comprehensive administrative assistance.
The groundbreaking collaboration was formalized during a press conference at the Indian Taipei Association in Taipei, witnessed by Ho Chun-hsin, President of the Taiwan Chamber of Commerce in India, and Manharsinh Yadav, Director General of the India Taipei Association.
Direct land ownership creates competitive advantage
The initiative, spanning 14,000 acres within Telangana's "Future City" project, offers Taiwanese investors significant advantages through a specialized industrial park operated by Allegiance Group, which holds permanent land ownership rights—a notable departure from the leasehold arrangements typically available in other regions. This strategic structure comes alongside substantial state-level incentives including construction, logistics, and workforce training subsidies specifically designed for Taiwanese businesses.
"The land for this industrial zone is held under permanent ownership by Allegiance Group, providing long-term security for tenant companies," explained Simon Lee, chairman of Allegiance Group. This comprehensive infrastructure hub will be complemented by "Formosa Town," an ecological community designed for expatriates to enhance the relocation experience for Taiwanese professionals.
'China+1' strategy and Trump 2.0 concerns drive investment
Jasper Liu, chairman of Optimus Technology, one of the electromechanical engineering firms that signed onto the project revealed that geopolitical factors are significantly influencing Taiwanese business strategies. "This is partly due to the potential impact of a 'Trump 2.0' policy," Liu explained. "It suggests that investment in supply chains could shift toward mitigating geopolitical risks. Therefore, we are aligning with this strategy by setting up production and sales bases in India in advance."
Liu's company, which specializes in electrical equipment and power supply systems, has already established operations in India and plans offices in key areas like Anjar and Hyderabad. "We have established a presence in Taiwan, mainland China, Thailand, and India. Next, we may expand southward to Indonesia and Malaysia," he noted, underscoring the broader "China+1" diversification strategy being adopted by many Taiwanese firms.
Two-pronged market approach strengthens investment case
The strategic value of the Telangana initiative extends beyond geopolitical hedging. "A major factor is the significant involvement of Taiwanese businesses in India's development. This presents a substantial business opportunity for us," Liu stated. His company plans to first serve existing Taiwanese businesses in India before expanding into the domestic market.
"We aim to gain a first-mover advantage," Liu explained. "Since we specialize in electromechanical engineering, we will follow Taiwanese businesses into this sector. This allows us to prioritize securing projects already developed by them."
Infrastructure and policy support drives momentum
A total of 11 Taiwanese companies have already signed up for the initiative, including Join It Sustainable Tech and Ever-Master Machinery. The group comprises four service firms, five electronics companies, and two non-electronic manufacturers. This collaboration is expected to inject INR20 billion (US$231.2 million) into the regional economy, potentially creating 100,000 direct and indirect jobs while accelerating the development of the 265-acre India Taiwan Industrial Park.
S.K. Sharma from the Telangana government highlighted the industrial zone's strategic location near manufacturing giants like Foxconn. The freehold land classification ensures long-term security for investors, with provisions for residential and social infrastructure addressing expatriate needs.
Bilateral economic relationship strengthens
Ho emphasized India's economic potential and the importance of Taiwanese participation in this growth story. The Taiwan Chamber of Commerce is working to strengthen bilateral economic ties by fostering an enabling environment through financial and infrastructural support.
The initiative marks a significant evolution in Taiwan-India economic relations, offering Taiwanese companies both a hedge against geopolitical uncertainties and access to India's growing market while bringing Taiwan's technological expertise to India's developing industrial landscape.
Article edited by Charlene Chen
