This poster congratulating Taiwan on its national day in New Delhi earlier in October saw angry reaction from China, whose relations with both Taiwan and India have deteriorated in recent months. Reports suggest India may finally be ready for talks over a formal trade deal with Taiwan. China has responded angrily over such reports. This is significant as India is giving signals to suggest that it is repositioning itself vis-a-vis China

The year 2020 is turning out to be an inflection point in the world's relationship with China. This also opens up new possibilities for Taiwan, which has had limited diplomatic and trade relations with the world. China objects to such ties and countries respond positively to Chinese concerns.

Taiwan has been pressing for a formal trade deal with India for years now. India has been reluctant given that it has supported the One-China policy, and also because a formal trade deal with Taiwan may engage it in a trade dispute with China at the World Trade Organisation (WTO).

Now, reports suggest that India and Taiwan are finally talking about having a trade deal. This comes at a time when both India and Taiwan are seeing their bilateral relations with China deteriorate sharply. Many see India and Taiwan as natural partners as both are democracies.

Though there is no official word on an India-Taiwan trade deal, the reports have gained currency from Chinese reaction. China said it is "firmly opposed" to such a deal asserting that "the one-China principle is the common consensus of the international community including India, and serves as political foundation for China to develop relations with any country".

Earlier, China had objected to media coverage of the Taiwan National Day in Indian media, inviting a sharp rebuttal from the Ministry of External Affairs. India and Taiwan do business but below-par of their mutual potential. Taiwan has an unofficial diplomatic relation with India with an office in Mumbai.

WHAT WILL HAPPEN WITH A DEAL?

A trade deal between India and Taiwan is expected to be beneficial for both the countries as India's dependence on Chinese export would reduce, and also increase the volume of foreign direct investment (FDI) in India. Currently, Taiwan ranks 40 among FDI investors. Taiwan can reduce the dominance of China particularly in telecom and electronic goods sectors.

For Taiwanese companies, India would be the biggest market opportunity as their markets in ASEAN, China, Japan and South Korea have reached a saturation point. A formal trade deal will also bring down tax rates on imports from Taiwan.

BUT WHY IS CHINA OPPOSED TO INDIA-TAIWAN DEAL?

It is a long story. China claims Taiwan is its "inalienable" part. Taiwan says it is an independent country.

China disputes Taiwan's claim citing history. Its claim dateline has origins in 239 AD. It is the year that finds a mention in Chinese records as the time a team of navigators had been sent to Taiwan by then rulers of China.

As has happened with many places having ancient civilisations, different parts of China saw different powerful kingdoms rise and exert their influence on distant lands. China says since it controlled Taiwan in the past, it has legitimate right to claim the territory now.

During the age of European exploration and colonialism, Taiwan became a Dutch colony in the 17th century before the Qing dynasty of China brought it under its control. China lost Taiwan to Japan in 1895 in a war.

Japan suffered heavy losses in the World War II (1939-45) and China took control of Taiwan after getting nod from the US and the UK. China was then being ruled by Chiang Kai-shek and his Kuomintang Party. But over the next four-five years, China was in a civil war that saw the current ruling Communist Party of China defeat the Kuomitang army and wrest control of mainland China.

Chinag Kai-shek fled to Taiwan (then called Formosa) with his band of supporters. He established his control over Taiwan and started his independent rule. For many years, Taiwan remained a member of the UN and also wielded veto power before losing both to China in 1971.

GROWING CHINA-TAIWAN TENSION

Over the years, the people of Taiwan pushed for democracy for which a process was initiated by Chiang Kai-shek's son Chiang Ching-kuo in late 1980s. The process culminated in 2000 when Taiwan elected its first non-Kuomitang president in Chen Shui-bian.

Chen was a pro-independence leader and his victory prompted China to announce an anti-separatism law in 2005. Relations have worsened between Taiwan and China following the victory of Tsai Ing-wen as Taiwanese president first in 2016 and again early this year.

She is an aggressive pro-independence leader and deepened Taiwan's ties with the US angering China, which has resorted to expansionism under Xi Jinping. Growing US-Taiwan relation has come in the wake of Chinese assertion in South Asia -- including a military standoff with India -- and territorial claims over South China and East China seas.

The US on its part is bound by the Taiwan Relations Act, which empowers its forces to intervene if there is a security threat to Taiwan. China has been posturing all through 2020 dropping hints that the Xi Jinping regime is ready for a military takeover of Taiwan.

China has attempted to stall all efforts by Taiwan to join an international body. Recently, it even resisted Taiwan's attempt to join the World Health Organisation (WHO). On the other hand, Taiwan is asserting its independent identity. In a recent move, it announced a roll out of its new passport in January 2021, dropping words, "Republic of China" and enlarging the word "Taiwan" on it.

Earlier this month, two Chinese diplomats engaged in a fist-fight with Taiwanese foreign office staff in Fiji during Taiwan National Day celebrations. Taiwan has demanded a probe by Fiji police while China has denied any wrongdoing.

WHERE DOES INDIA COME IN PICTURE?

The US has been canvassing for international support against Chinese unilateralism. India had remained indifferent to the call as it did not want to jeopardise its relations with China. But the Chinese military push in Ladakh and its open support to Pakistan's terror designs against India have forced India to reposition itself.

This repositioning of India has also seen it shedding its reluctance in keeping Australia out of the Malabar naval exercise. The US had been pushing India to agree to Australia's participation. India has now finally agreed to it and Australia would take part along with Japan and the US in the next Malabar naval exercise.

Incidentally, Australia's relations with China have worsened as it demanded an independent probe into the origin of Covid-19 in Chinese city, Wuhan in 2019. China has been unwilling to let a free and independent probe happen on its territory to determine the source of Covid-19 pandemic.