Prospects of an India-Taiwan Strategic Partnership: Economics, Security, and Expected Utility Theory

Abstract

The China-India border dispute has witnessed escalations recently with China making fresh claims along the disputed border and deaths of Indian military personnel. This study examines the likelihood of a strategic partnership between India and Taiwan. We begin by assessing India’s ‘Act East Policy’ and Taiwan’s ‘New Southbound Policy’ for any points of congruence between these two policies. We then propose an expected utility model of India’s decision calculus. Using the theoretical implication of the model, we then examine the likelihood of a strategic partnership along two dimensions- an economic and a defence-security partnership. This study argues that the value added by an economic strategic partnership between the two countries may be substantial and the likelihood of such a partnership may be significant. However, the likelihood of a defence-security partnership is substantially less in the bilateral sphere although at the multilateral level there are areas where defence cooperation can occur.