Japan tor give subsidies to Japanese company to shift manufacturing unit in India from China

by pranjalipargaonkar

New Delhi: The Japanese government has taken a major step to financially harm China. It would provide subsidies to the Japanese companies, which will manufacture their products in ASEAN countries instead of China. India and Bangladesh have been included in the list of relocation sites for projects. In other words, the Japanese government will reward companies leaving China and coming to India.

The Government of Japan has allocated 23.5 billion Yen in its  2020 Supplementary Budget for subsidies to encourage companies to expand their manufacturing sites in the ASEAN region. This is done to bring in flexibility to the ASEAN-Japan supply chain, with the second phase of applications commencing on 3 September.

The subsidy program will be implemented to reduce its dependence on a particular region and to develop a system that can provide a sustainable supply of medical supplies and electronic equipment in an emergency.

After Thailand, Japan has hit China financially. Thai government first suspended the submarine deal, then talked about canceling the Kra Canal project, which China had long been eyeing. New Delhi has banned more than 100 applications of Dragon using digital strikes, while other countries have come out against Beijing as well.


Japan has its own set of rivalry with China over the Senkaku Islands. China has asserted its claim to the Japanese-controlled areas. Despite this, the supply chain of Japanese companies is heavily dependent on China. However, it was cut during the Corona outbreak and now Japan wants its businesses to look to India and ASEAN countries instead of China.

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