India-Taiwan : Partners in Success

The transformation of India’s ‘Look East Policy’ into ‘Act East Policy’ with Taiwan has redefined its relation with the country and
has deepened its focus to collaborate and get the best of each other exchanged.

That Taiwan shares the sentiment in equal measure was evident at the recently held Smart Asia 2017 expo where James C F Huang, Chairman, Taiwan External Trade Development Council (TAITRA) expressed the importance of India in Taiwan’s scheme of things.

With its 1.3 billion people, India makes for a lucrative market for Taiwan that has plans to collaborate with India to enhance its electronic manufacturing capability and develop industrial parks and smart cities as part of ‘Make in India’ initiative, informed Huang. The country can be of immense help to India in its plans to phase out combustion engines by 2030 since Taiwan has an entire ecosystem in this business, he added.

India - investment destination

The bilateral trade between the countries is constantly on the rise. It grew nearly five-fold from $1.19 billion in 2001 to more than $5 billion in 2016 and, as informed by Huang, is set to touch $6 billion by the end of 2017.

India ranks as Taiwan’s 16^th largest export destination and 21^st largest source of imports. India’s exports to Taiwan increased from $550 million to $2.2 billion, while India’s imports from Taiwan increased from $640 million to $3 billion in the same period.

“As of the end of 2016, around 90 Taiwanese companies have set up business operations in India, with a total investment amount of
$1.4 billion in the fields of information and communication technology, medical devices, automobile components, machinery, steel, electronics, construction, engineering, financial services, etc.,” said Walter M S Yeh,
President & CEO, TAITRA.

The Taiwan Electrical and Electronic Manufacturers’ Association has selected one site in Greater Noida to build an electronics manufacturing cluster with a view to deepening supply chain collaboration with Indian partners, he revealed.

According to George Lin, Director, Taipei World Trade Center, Liaison Office in Kolkata, Taiwan has the best and efficient industrial clusters, which can be the most practical model for India to develop manufacturing industry. “The scale of the Indian market provides the best opportunity for Taiwanese companies to expand. Most of all, Indian companies and Taiwanese companies can join hands to create their own brands,”
he added.

Machine tools exports

Taiwan plays a prominent role in the machine tool industry by developing leading-edge technologies and providing critical components. Its companies are able to supply all necessary machinery, machine tool components, and turnkey solutions to world’s manufacturers for their production lines. The country’s domestic market is too small and hence its manufacturing sector relies heavily on the global market. Nearly 70 percent of its total output is for export, which is highest in the world. And most of its companies being MSMEs, their focus is on OEMs rather than marketing their own brand.

This co-operation has led to it becoming the sixth largest machine tool manufacturing country and the fourth largest machine tool exporter of the world.

India is one of the major users of Taiwan-made machine tools. The nation is Taiwan’s 8th largest trade partner. Metal-cutting machine tools, machine tool parts, and forging equipment are among the major machinery shipped to India.

Last year India imported
$130.9 million worth of assorted machine tools from Taiwan,
3.41 percent higher than in 2015. “India’s procurement from Taiwan continues to grow. Taiwan’s excellent quality products are highly competitive and can meet the strict requirements of the buyers from India,” said Yeh.

“The increase in the demand for the metal forming machinery is from the local automobile industry. The export volume of lathes has reached $11 million which is more than twice as compared to the same period last year,” explained C C Wang, President, Taiwan Association of Machinery Industry (TAMI).

Metal forming expertise

According to Wang, Taiwan’s technologies and the efficiency that they promise can build a strong foundation for the Indian industry. In the metal forming sector, Taiwan has its expertise in mass production technologies in materials such as carbon fiber and aluminum alloy. Its servomotors, which meet the qualification of green manufacturing, can help Indian companies contribute to environmental protection. Its Intelligent Manufacturing Execution System (MES) allows the customers to receive the information for the product line and make the adjustment accordingly any time through
the Internet.

Manufacturing collaboration

Taiwanese manufacturers have been showing their interest in Indian companies. Their strong participation in the recently held Delhi Machine Tools Expo (DMTX) was a testimony to
the fact. Tongtai debuted its OEM co-operation with Lokesh Machines Ltd to develop EZ-5 Drilling & Tapping Center, an advanced model that is suitable for automotive industry.

S&T Engineers Pvt Ltd is yet another Indian company that was keen to bring in innovative Taiwanese innovative technology at an affordable cost. It has tied up with Manford Machinery Co Ltd for a co-production venture and has launched STM range of machining centers. “While completely assembled machines come from Taiwan, the guarding, electric work, application testing and inspection is done in our unit in India,” said Shanmugasundram, Managing Director, S&T Engineers.

“In the past two years, we have successfully installed over 400 STM vertical machining centers pan India out of which many are repeat buying customers,” he informed. Taiwan brands majorly represented by S&T are YCM, Vertex, Excetek, Palmary, Manford, and Detron.

James Hsieh, President, Manford Machinery Co. Ltd reciprocated similarly, “We have doing business with S&T for the last 20 years and find the company very promising. There is a lot of technology transfer from Taiwan to S&T. The growth of Indian machine tools has been very rapid in the last few years. The sector holds immense potential. For us the Indian market is
very important.”

Taiwan’s strength

In the past decades, Taiwan has grown significantly in the production of machine tool components including castings, cutters, ball screws, and linear guide ways. Added to this, its comprehensive supply chain is one of its core strengths.

Indian manufacturers in their respective sectors use Taiwanese machinery because of its lower cost, rigid quality, and plentiful services. “With technology know-how, Taiwanese manufacturers are skilled at customization and most importantly, they have been responding swiftly to changing market demands,” pointed out Sundram with the example of Taichung-based firm, Gifu Enterprise Co., Ltd that specializes in automatic tool changers and custom-builds more than 80 percent of orders from
its clients.

According to Sundram, the Taiwan machine tool industry is known for its attention to detail and the quality and versatility of its machining centers that are known for high quality Meehanite Castings which offer highest level of static and dynamic stability, optimum dampening capacity, and superb vibration absorption. “Taiwanese spindle suppliers are proficient at building spindles with simple designs and a wide range of specifications, which solve temperature issues while improving working conditions. Taiwanese are adept at integrating tooling systems with ATC systems and tool magazines, supported by domestic cam ATC suppliers and the metalworking supply chain in the Greater Taichung area. The development of gears and index tables is also highly touted in Taiwan,”
he added.

Having had first-hand experience with Taiwanese machines for the past many years, auto components manufacturer, Bharat Raj Goel, Managing Director, Reva Transmission, testifies to their reliability. “We bought our first Taiwanese machine in 2004 and presently own 52 machines including Cold Forging Presses, Hot Cold Forging Presses, SPMs for cutting ferrous and non-ferrous metals. Their know-how in technology makes us repeatedly place orders for the Taiwan-make.”

Important for each other

The countries have realized each other’s significance in their progress. While Taiwan is known for its hardware manufacturing, India’s software industry is famous world over. It’s about time India explored Taiwan’s potential to contribute in “Make in India”, “Digital India” and “Smart Cities” campaigns, and attain the common goal of success.