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.
By expanding the scope of the subsidy programme, Japan aims to reduce its dependence on a particular region and to build a system which is able to provide a stable supply of medical materials and electronic components even in an emergency, reports Nikkei Asian Review.
The government has allocated 23.5 billion yen ($221 million) in 2020 supplemental budget for the subsidy to encourage companies to disperse their manufacturing sites across ASEAN region.
In conjunction with the second round of applications which began on September 3, projects that will contribute to the resilience of the ASEAN-Japan supply chain were added to the list, assuming relocation plans to India and Bangladesh.