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Explainer: Why Taiwan Wants Indian Migrant Workers

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By Aroonim Bhuyan

Published : May 5, 2024, 7:55 PM IST

Updated : May 6, 2024, 4:19 PM IST

Reports suggest that following an agreement signed between India and Taiwan in February this year, the East Asian island nation will be deploying Indian migrant workers in the manufacturing sector initially. Why is Taiwan seeking Indian migrant workers and why is the East Asian country facing the problem of labour shortage? ETV Bharat finds out in detail about the issue.

Following an agreement signed between India and Taiwan in February this year to bring in Indian migrant workers to the East Asian island nation, it has now been decided that such Indian workers will be first deployed in the manufacturing sector.
Daily wage labourers wait in line during the Covid-19 crisis in 2020 (File Photo: ETV Bharat)

New Delhi: Following an agreement signed between India and Taiwan in February this year to bring in Indian migrant workers to the East Asian island nation, it has now been decided that such Indian workers will be first deployed in the manufacturing sector.

According to reports in Taiwanese media, a decision in this regard was taken during a meeting in Taiwan’s Ministry of Labour earlier this week. Migrant worker groups, employer representatives, labour brokers’ association, as well as scholars and experts from Taiwan and India attended the meeting, CNA news agency reported.

“According to Su Yu-kuo, head of the Workforce Development Agency’s Cross-Border Workforce Affairs Center, a consensus was reached for the manufacturing industry to be the first to recruit Indian workers,” the CNA report stated. “He added that suggestions were also made to let Taiwanese businesses with factories or operation sites in India be the first businesses in the manufacturing industry to recruit Indian workers.”

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Why Taiwan Wants Indian Migrant Workers (ETV Bharat Graphics)

India is the fifth country from which Taiwan will host migrant workers in the face of the labour shortage that the country is facing. Vietnam, Indonesia, the Philippines and Thailand are the other countries. As of now, Taiwan is home to around 700,000 migrant workers.

Apart from manufacturing, Indian workers are expected to be deployed in sectors like construction, agriculture and care-giving for elderly people.

Why is Taiwan facing the problem of labour shortage?

One of the most significant reasons for labour shortages in Taiwan is the country’s aging population. Taiwan's birth rate has been consistently low, leading to a shrinking workforce. As the population ages, the proportion of working-age individuals decreases, leading to a smaller labour pool. This demographic shift has created a significant gap between the number of available jobs and the number of people to fill them.

Taiwan has one of the lowest birth rates in the world, contributing to a reduced number of young people entering the workforce. The low birth rate is influenced by factors such as high costs of living, delayed marriage and childbearing, and a growing focus on careers and education.

Taiwan has also seen significant emigration, particularly among young, skilled professionals seeking better opportunities abroad. The “brain drain” phenomenon has resulted in a loss of talent, further exacerbating the labour shortage. Many of these emigrants choose to work in countries with higher salaries and better career prospects.

Many young people in Taiwan are increasingly pursuing careers in technology, finance, or other sectors perceived as more prestigious and lucrative. This shift has led to a declining interest in traditional industries like manufacturing and agriculture, where labour shortages are often more acute.

Another reason is that Taiwan’s immigration policies have historically been relatively strict, limiting the ability to attract foreign workers to fill labour shortages. While some policies have been relaxed to allow more foreign labour in specific industries such as caregiving and manufacturing, the overall approach to immigration remains conservative, making it difficult to attract a sufficient number of workers from abroad.

In some sectors, wages have not kept pace with the rising cost of living, leading to a lack of incentive for workers to enter or remain in those industries. Additionally, poor working conditions, long hours, and limited job security can make certain jobs unattractive, contributing to labour shortages in those areas.

Taiwan’s educational system has shifted focus to higher education, with more people obtaining university degrees. However, this shift has led to an educational mismatch, where many graduates’ skills do not align with the needs of the labour market. This mismatch contributes to labour shortages in certain sectors, where there is a lack of skilled workers despite a surplus of university graduates.

The COVID-19 pandemic has also had a significant impact on Taiwan’s labour market. Border closures and travel restrictions made it challenging to recruit foreign workers, exacerbating existing shortages. The pandemic has also disrupted various industries, leading to changes in employment patterns and workforce availability.

After Southeast Asian nations, why is Taiwan seeking migrant workers from India?

“Taiwan, like other East Asian countries, is a developed nation and is ahead of the curve,” K Yhome, Fellow at the Shillong-based Asian Confluence think tank, told ETV Bharat. “To maintain this, they need a labour force that is sustainable.”

As far as India is concerned, we have a huge youth population and labour force, he said. “Taiwan suffers from this problem. So, Taiwan opening up for Indian workers is a complementary arrangement.”

According to a CNA report last year, Taiwanese firms were particularly interested in hiring people from India’s northeastern states because of similarities in culture and diet.

However, a statement by Taiwan Labour Minister Hsu Ming-chun in March this year about why workers from the Northeast were preferred sparked a controversy. During an interview to CNA, Minister Hsu mentioned that the ministry would prioritise hiring workers from northeastern India, explaining that “their skin tone and dietary practices are more aligned with ours”.

Following the controversy about allegations of racism that erupted, Hsu extended an apology at a legislative hearing expressing her regret for “inaccurate” comments, clarifying that Taiwan’s labour policies aim for equality, devoid of discrimination, be it for local or foreign workers.

According to Yhome, the Minister should have made her comments more broad-based. However, he said that Taiwanese firms’ preference for workers from northeastern Indian does hold water. “Look, the culture and diet of people in the states of northeastern India do have similarities with countries of Southeast and East Asia,” he explained. “The society in the Northeast is very liberal in nature.”

He explained that if a person from an interior region in some other part of India is sent to Taiwan as a migrant worker, he or she will suffer from a culture shock.

At the same time, Yhome said that non-northesterner Indians living in metros should not have problems in adjusting with life in Taiwan. “Indians from all regions in the country living in metros usually do not have problems while relocating to some other country,” he said. “Also people from other parts of India living in the Northeast should not have problems in adjusting with life in Taiwan.”

How have India-Taiwan relations evolved over the years?

India was one of the first countries to establish diplomatic relations with Taiwan (then called the Republic of China) after its formation in 1949. However, following the recognition of the People's Republic of China (PRC) by India in 1950, official diplomatic ties between India and Taiwan were suspended. Since then, India has adhered to the ‘One China’ policy, which recognises the PRC as the sole legitimate government of China.

Officially, India and Taiwan do not have formal diplomatic relations. However, both countries maintain representative offices in the form of the Taipei Economic and Cultural Center in New Delhi and two other cities in India and the India-Taipei Association in Taipei, respectively. These offices serve as de facto embassies, facilitating official interactions and cooperation between the two sides.

Despite the absence of formal diplomatic ties, India has consistently supported Taiwan’s participation in international organisations, such as the World Health Organization (WHO) and the International Civil Aviation Organization (ICAO), where statehood is not a prerequisite for membership.

India is a major focus area of Taiwan’s new foreign policy, dubbed the New Southbound Policy, adopted in 2016. According to this policy of Taiwanese President Tsai Ing-wen, the East Asian island nation is striving to broaden exchanges and cooperation with India and five South Asian nations, the 10 member-states of the Association of Southeast Asian Nations (ASEAN), and Australia and New Zealand in areas such as commerce, culture and technology.

This will mean lesser dependence on mainland China for Taiwan’s economic development. Taiwan is the world’s 22nd largest economy and was dubbed one of the four Asian tigers in the late 20th century, the others being Hong Kong, Singapore and South Korea.

The economic relationship between India and Taiwan has been a significant driver of their cooperation. Taiwan has emerged as a major investor in India, particularly in the areas of information technology, electronics, and hardware manufacturing. Major Taiwanese companies, such as Foxconn, have established manufacturing facilities in India, contributing to job creation and technological transfer.

Bilateral trade between India and Taiwan has grown steadily over the years, with Taiwan being India’s third-largest trading partner in Asia after China and Japan. The two countries have signed agreements to promote investment and facilitate economic cooperation.

According to figures issued by TECC Delhi in 2023, the total bilateral trade between Taiwan and India amounted to approximately $8.224 billion. India is the 16th largest trading partner for Taiwan. Taiwan’s exports to India reached $6.013 billion, marking a 13 percent growth and positioning India the 12th largest export market for Taiwan. On the import side, Taiwan imported goods worth $2.211 billion from India.

India and Taiwan have actively promoted educational and cultural exchanges. Taiwan has been a popular destination for Indian students seeking higher education, particularly in fields like engineering, technology, and management. Similarly, Indian cultural centers and language institutes have been established in Taiwan, fostering greater understanding and appreciation of Indian culture.

Both countries have also collaborated in areas such as tourism, academic research, and cultural festivals, promoting people-to-people connections and mutual understanding.

Despite the lack of formal diplomatic ties, India and Taiwan have shared strategic interests, particularly in the Indo-Pacific region. Both countries have expressed concerns about China’s growing assertiveness and have advocated for a rules-based international order, freedom of navigation, and respect for territorial integrity.

India and Taiwan have explored opportunities for cooperation in areas such as maritime security, cybersecurity, and counter-terrorism, although the extent of such cooperation remains limited due to India's sensitivity towards China’s stance on Taiwan.

According to Yhome, Taiwan signing the migrant workers agreement with India should also be seen from the context of China’s belligerence in the South China Sea. “This migrant workers’ agreement between India and China should be seen as the two countries investing in the growth of each other’s economy,” he said.

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Last Updated : May 6, 2024, 4:19 PM IST
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