The Japanese government has allocated 23.5 billion yen ($221 million) as on 2020 supplemental budget for the subsidy, to encourage companies to disperse their manufacturing and production sites across Southeast Asian countries. The country has decided to give a generous amount of Incentive if the Manufacturers of the country shift its production From China to India.
According to some reports, India and Bangladesh have been added to the list of nations to which Japanese companies can shift their operations to avail of this incentive.
Japanese manufacturers will now be eligible for subsidies if they shift production out of China to India or Bangladesh.
The government program aims 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
According to Nikkei, the total amount of subsidies that will be provided is reported to reach several billion yen.
The supply chain of Japanese companies currently heavily relies on China. During the COVID-19 pandemic, the supplies were cut off. This programme however will help at reducing the dependence on Chinese supply chains.
Additional 30 companies are also said to receive funds by the Japanese Government to shift their factories out of China to Southeast Asian nations like Vietnam, Myanmar, and Thailand, etc.
