Another blow to China as Japan adds India, Bangladesh to relocation subsidiary
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With Japan adding India, Bangladesh to its relocation subsidiary, that will now let Japanese manufacturers qualify for subsidies if indeed they shift production out of China to India or Bangladesh. Japan, through this expansion programme is aimed at diversifying the country's supply chains. This is really a reason behind worry for China.
The Ministry of Economy, Trade and Industry (METI) also provides subsidies to Japanese manufacturers that shift their manufacturing units from China to the other ASEAN countries.
According to reports, Japan’s supplementary budget for 2020 fiscal has earmarked 23.5 billion yen for companies that move production to the Southeast Asian countries.
By expanding the scope of the subsidy programme, Japan aims to reduce its dependence on a particular region and really wants to create a system which is able to provide a stable way to obtain medical materials and electronic pieces even during emergency situations.
Supply chain of Japanese companies heavily relies on China, however, through the COVID-19 pandemic, the supply was take off.
The first round of application closed in June, where Japanese government approved 30 manufacturing-related projects, including HOYA’s manufacturing of electronic elements project in Vietnam and Laos. It has provided subsidies overall total of 10 billion yen.
It could be recalled that Minister of Commerce and Industry Piyush Goyal had in August said that India and Japan want to have trusted partners from authentic investors.
Speaking at the third Edition of the Invest India Exclusive Investment Forum - Japan Edition, through video conference. (Digital Roadshow) for Japanese companies, he said that it's important that Japan and India expand trade and business relationships.
At the summit, Secretary, Department of Industry and Internal trade Guruprasad Mahapatra said India is likely to create the 13th Japanese industrial township in Assam, a move aimed at promoting domestic manufacturing and strengthening financial ties between your two countries. He said they are working on GIS enabled data base of industrial areas and clusters in the united states.
Source: https://www.dnaindia.com
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