Japan Adds India And Bangladesh To ‘China Exit’ Subsidy Destinations

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JAPANEARMARKED$2.2 BILLION(APPROX. 220 BILLIONYEN)

Japanese manufacturers will now be eligible for subsidies if they shift production out of China to India or Bangladesh, in an expansion of a government program aimed at diversifying the country’s supply chains.
The government’s supplementary budget for fiscal 2020 earmarked 23.5 billion yen for companies that move production to Southeast Asian nations.
When the Ministry of Economy, Trade and Industry opened up a second round of applications on Thursday, it added “projects that contribute to the resilience of the Japan-ASEAN supply chain” to the list of qualifying moves, eyeing relocations to countries such as India and Bangladesh.
Manufacturers can receive subsidies for feasibility studies and pilot
Companies have already started moving.

The program aims to reduce Japan’s relianceon a handful of linksin its supply chains, particularly China, and ensure a steady flowof such products as medical supplies andelectrical componentsin an emergency.
This issue came to the forefront with China’s shutdown in the early days of the pandemic.
China is Japan’s biggest trading partner under normal circumstances, but imports from China slumped by almost half in February as the disease shuttered factories, in turn starving Japanese manufacturers of necessary components.
Meanwhile, Indian Prime Minister Narendra Modi on Thursday proposed reshaping global supply chains based on trust and stability, and not just cost benefits, as the country eyes new logistics networks that are less dependent on China.