Japan will extend the subsidy to its companies under a 23.5-billion yen (about $221 million) plan for moving their factories from China to India and a few others, in the latest sign of deepening engagement between Tokyo and New Delhi to bolster the supply chain amid Beijing’s growing belligerence in the region. Japan will add India and Bangladesh to the list of “relocation destinations”. In April, following the Covid-19 pandemic, Tokyo had announced a large subsidy program of 220 billion yen (about $2 billion) for its companies shifting production back to Japan and set aside another 23.5 billion yen for those seeking to move facilities to Asean member states.
By expanding the scope of the subsidy program now to include India and Bangladesh, Japan aims to reduce its dependence on a particular region (China) and build a system that is able to provide a stable supply of medical materials and electronic components even in an emergency, according to Nikkei. Japan’s ministry of economy, trade, and industry said as many as 57 companies, including facemask-maker Iris Ohyama and Sharp Corp, will receive a total of 57.4 billion yen ($536 million) in subsidies. At the same time, another 30 companies would get funds to move manufacturing to Vietnam, Myanmar, Thailand, and other Southeast Asian nations. The second round of applications for availing of subsidy started on Thursday.