The Taiwan-China dispute has alarmed the global economy. While the globe is still reeling from the consequences of the Ukraine-Russia conflict, which has resulted in skyrocketing inflation and commodity prices, another crisis-like situation is on the horizon, which has real estate players terrified. As tensions between the two countries rise, navimumbaihouses.com investigates the impact on Indian real estate.

Tensions between Taiwan and China extend back to the early 1900s and grew worse after 1949. Since March 2022, there has been widespread chatter about an impending disaster. The goal has always been to gain autonomy and power. While China wants the rest of the world to recognise the island as part of its mainland, Taiwan wants to be recognised separately. Although tensions have always existed in the Taiwan-China conversation, the present situation has been exacerbated by Nancy Pelosi’s visit to Taipei in August 2022. But what does the confrontation between Taiwan and China signify for India? How will it affect Indian real estate and homebuyers? 

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Taiwan-China Dispute : Taiwan is an importer.

Living in a globalised society has made the flow of technology, raw materials, and other items more easier; nevertheless, in the case of an inter-country conflict, this exchange is substantially influenced and is frequently used to polarise other countries.

India has a substantial trading relationship with Taiwan, from which it buys electrical machinery, plastics, nuclear reactors, and iron and steel. Although mounting tensions may not have a direct impact on real estate, adjacent businesses committed to producing building materials and cars are likely to feel the strain.

Taiwan is the world’s biggest supplier of semiconductors, accounting for around 63 percent of the market. In layman’s terms, a semiconductor is a component in any electrical device that serves as the gadget’s brain and powerhouse. Phones, laptop computers, and automobiles are examples of daily devices that use semiconductors. Taiwan Semiconductor Manufacturing Company (TSMC) is a worldwide semiconductor industry leader, accounting for around 54 percent of the market.

In terms of commerce with India, Taiwan has been assisting the nation in developing its own semiconductor manufacturing base in order to enhance the respective economies’ policies. 2020, India purchased semiconductors worth an estimated USD 2.4 billion, and projections indicate that India-Taiwan bilateral relations would grow further in 2021, with commerce worth more than USD 7 billion.

In addition to semiconductors, India buys iron and steel from Taiwan, accounting for around 4% of the country’s commerce with the island.

Taiwan-China Dispute: The impact of the cross-country crises

The tension caused by the Ukraine-Russia crisis and its impact on steel and cement prices has already occurred in 2022. Because Russia and Ukraine account for about 20% of global steel exports, prices increased by over Rs 15,000 per tonne in March 2022, resulting in a roughly 25% price increase. This had an impact on the building sector, which relies heavily on steel as a raw material. The crisis also wrecked havoc on the cement industry. With the commodity’s price rising by about 43 percent in the January-March 2022 quarter. Developers felt the heat of the situation and were forced to boost property prices by 10-15%.

Experts say that because the world economy is already under severe inflationary pressure. The impact of the Taiwan-China conflict will be delayed; nonetheless, the global recession may undergo more de-growth as a result of the crisis.

What is the outlook for Indian real estate?

The consequences of the Ukraine-Russia conflict are being felt in India. Where inflation is already at 7% and the Reserve Bank of India (RBI) has been boosting the repo rate to handle the situation. The high input prices have a negative impact on the Indian real estate market; so, worry that a similar situation may occur as a result of the Taiwan-China dispute is logical.

However, analysts say that India and Taiwan are both trade countries. And that any stress in one country’s political position should not affect the transactional relationships they share. As a result, the impact of the Taiwan-China issue on the Indian real estate market has yet to be seen.

Political conflicts between countries not only harm the people involved, but they also disrupt the global economy’s equilibrium. Although the impacts of the Taiwan-China dispute have not yet reached India. It is hoped that the government would take precautionary measures to avert any fallout from the issue.

However, analysts say that India and Taiwan are both trade countries. And that any stress in one country’s political position should not affect the transactional relationships they share. As a result, the impact of the Taiwan-China issue on the Indian real estate market has yet to be seen.

Political conflicts between countries not only harm the people involved, but they also disrupt the global economy’s equilibrium. Although the impacts of the Taiwan-China dispute have not yet reached India. It is hoped that the government would take precautionary measures to avert any fallout from the issue.

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