Japan to encourage companies shifting base from China to India

The government has allocated 23.5 billion yen in the 2020 supplementary budget for subsidies to encourage companies to spread their manufacturing sites in the ASEAN region.

Japanese manufacturers will now be eligible for subsidies if they transfer production outside of China or India in an expansion of a government program aimed at diversifying the country’s supply chains.

According to the Nikki Asian Review report, by expanding the scope of the subsidy program, Japan aims to reduce its dependence on a particular region and build a system capable of providing a stable supply of medical supplies and electronic equipment Ho.

The government has allocated 23.5 billion yen ($ 221 million) in the 2020 supplementary budget for subsidies to encourage companies to spread their manufacturing sites in the ASEAN region.

Projects contributing to the flexibility of the ASEAN-Japan supply chain were added to the list, with the second round of applications commencing on 3 September, assuming relocation plans for India and Bangladesh.

The second round of application targets feasibility studies on decentralized manufacturing sites, experimental introduction of facilities and implementation of model projects. Nikki said that the total amount of subsidy which is reported to reach several billion yen.

The supply chain of Japanese companies currently depends heavily on China. During the COVID-19 epidemic, supplies were cut.

In the first round of applications closed in June, the Government of Japan approved 30 manufacturing projects, including the construction of electronic components project in Vietnam and Laos, and provided a subsidy of 10 billion yen.

Src. Nikki Asian