Japanese companies to get subsidies for shifting manufacturing base from China to India


    Japan’s Ministry of Economy, Trade and Industry (METI) has added India to the list of relocation destinations for companies which shift their manufacturing sites from China to ASEAN countries. This move is a part of a government programme that is aimed at diversifying and improving the country’s supply chain. 

    BHUPESH RASEEN Chairman-Mobile Advisory Committee, TMA Board Member-Ghana India Trade Advisory Chamber (GITAC)

    Japan has taken firm step towards the supply chain resilience initiative by offering incentives to companies shifting production base from China to India in an effort to disperse source areas. 23.5 billion Yen have been allocated for such subsidies to encourage companies to set up across ASEAN region, India and Bangladesh in major limelight.This move is a part of a government programme that is aimed at diversifying and improving the country’s supply chain. 

    Japanese manufacturers to get subsidies for shifting production from China to India. The supply chain of Japanese companies currently heavily relies on China. As a result of which Japan faced troubles during the coronavirus pandemic and the subsequent shutdown in China.

    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. By expanding the scope of this programme, Japan will also manage to reduce its dependency on any country and building stable relationships would enhance bilateral trade. It is great learning from Japan, for creating a stable supply, particularly for electronic components & medical materials especially during times of emergencies.

    There is now opportunities for Indian suppliers and manufacturers. They need to explore all possible ways of leveraging this opportunity.Indians will grab this opportunity with both hands and arrange grand welcome into India. Right time to do a “Maruti”kind of project in electronic component manufacturing by joint venture. The initiative has come at the most opportune time as there is a likelihood of rechurning of supply chains in the Indo-Pacific region and it is incumbent upon India to take the initiative.  It is the need of the hour that India should play a big role in the supply chains

    Indian government needs to quickly make loads of progress in the areas of Policy, FDI & Infra to attract Japanese manufacturers. Indeed India is going to be the best investment place and likely to get investments from Japan & US which can heavily contribute to the Indian GDP & generate employment. Opportunity is for India to emerge as “Manufacturing Hub for the world”. 


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