Japanese firms to get subsidies for shifting production from China to India, Bangladesh: Report

Japanese manufacturers that shift production out from China to India or Bangladesh will now be eligible for subsidies, as per a report by Nikkei Asian Review.

This is part of a government programme, whereby Japan aims to cut dependence on just a particular region and push companies to diversify their manufacturing sites across the Southeast Asian countries.

The Japanese government has added India and Bangladesh to the list of relocation destinations that would make companies eligible for benefits.

Currently, Japanese companies see their supply chains rely heavily on China, as a result of which it faced troubles during the coronavirus pandemic and the subsequent shutdown in China.

In its 2020 supplemental budget, the government allocated 23.5 billion yen to fund subsidies meant to encourage firms to disperse their manufacturing sites across the ASEAN region.

Japan's Ministry of Economy, Trade and Industry added "projects that will contribute to the resilience of the ASEAN-Japan supply chain" to its latest list, many of which are eyeing relocation to India and Bangladesh.