The Japanese government is looking to diversify its manufacturing from China to other countries – especially in Bangladesh. The government’s supplementary budget for FY 2020 kept $221 million for companies that move production to Southeast Asian nations.
Recently the Ministry of Economy, Trade and Industry opened up a second round of applications, where it said, “projects that contribute to the flexibility of the Japan-ASEAN supply chain” is in the list of qualifying moves, eyeing relocations to countries such as Bangladesh and India.
Subsidies will be received for feasibility studies and pilot programs. Though more grant is expected to rise as the shifting can run into the tens of millions of dollars.
Japan plans to cut its reliance on China – as the COVID-19 pandemic shutdown hurt its supply chain.
Not to mention, Japanese Economic Zone is being built in the Araihajar of Narayangonj. The 650 acres of land in Araihazar to set up a dedicated industrial park for Japanese investors.
The zone will provide employment for 200,000 people. According to a latest study of the Japan External Trade Organization, investment by Japanese companies in Bangladesh has been steadily increasing at a rate of 16-17% for the last couple of years, with a majority showing growing interest in expansion.