The Japanese government will offer subsidies to its manufacturers if they shift their production out of China to India or Bangladesh. The move is said to expand the Japanese government programme aimed at diversifying the supply chain, Livemint reported on Friday.
The Japanese government has allocated $221 million (or Rs 1,615 crores) in its 2020 supplemental budget as subsidy to encourage companies to disperse and shift to India and across the ASEAN region. By expanding the scope of the subsidy programme, Japan aims to reduce its dependence on a particular region and build a system for stable supply of medical or electronic equipment even during an emergency.
The second round of applications began on Thursday, where the projects that will contribute to the resilience of the ASEAN-Japan supply chain were added to the list, assuming that Japan is looking forward to relocating its supply chain with India and Bangladesh.
China is Japan’s biggest trading partner under normal circumstances, but imports from China have slumped by almost half in February due to lockdowns to curb the spread of the virus hitting manufacturing and the supply chain.