Japan is now offering subsidies worth ₹1,618 crore to companies moving out of China to India and Bangladesh: Report

• This program is a part of the Japanese government expansion program aimed at diversifying the country's supply chains, according to a Nikkei Asian Review report.
• In its first round of subsidies in July, the government of Japan granted more than 10 billion yen to 30 companies for relocating their manufacturing to Southeast Asia.
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The Japanese government will now offer subsidies worth ₹1,618 crore to eligible Japanese manufacturers if they shift their production units out of China to India or Bangladesh, according to a Nikkei Asian Review report.

The supply chain of Japanese companies heavily rely on China, and by making this move, Japan is aiming to ensure a steady flow of raw material and products as medical supplies and electrical components in an emergency like coronavirus.

This program is a part of the Japanese government expansion program aimed at diversifying the country's supply chains. In the supplementary budget for fiscal 2020, the Japanese government earmarked 23.5 billion yen (₹1,615 crore) for companies that will move their production to Southeast Asian countries.

According to reports, when the Japanese Ministry of Economy, Trade and Industry opened up the second round of applications it said the programme is for the "projects that contribute to the resilience of the Japan-ASEAN supply chain" and are eyeing relocations to countries such as India and Bangladesh.

The manufacturers can use the subsidies for feasibility studies and conducting pilot programs. The report said the total amount granted is expected to run into the tens of millions of dollars, said Nikkei.

In its first round of subsidies in July, the government of Japan granted more than 10 billion yen to 30 companies for relocating their manufacturing to Southeast Asia. For example, Hoya, a Japanese med-tech company, is moving its production to Vietnam and Laos. According to Nikkei, another 57 are receiving support for shifting their production facilities.

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