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Question:  Japan’s move to provide subsidy for relocating manufacturing industries to India can contribute to greater Indo-Japan ties. Explain.


Answer:  Japan has announced that it will provide subsidies for manufacturing firms relocating back to Japan from China. In a recent move, the government has extended the subsidies to firms that are keen to shift to India and Bangladesh. This aims at diversifying supply chains.

Benefits of subsidy move

  • Integrated economy
    India and Japan are already large trading partners. With the move, it is expected to benefit economy of India and Japan as both will witness stability in prices of products. India will benefit from technology transfer through better interaction with Japanese firms.
  • Tackling China’s influence
    Most of global manufacturing is dependent on China. The global manufacturing was seriously hampered when China announced lockdown. Diversification will protect against any issues that may hamper supply of goods in future. It will also help reduce China’s hegemony.
  • Stronger bilateral ties
    India and Japan are already strategic partners with relations ranging from trade to defence. Grouping such as Quad, G20 have already benefitted India Japan relations. This move is expected to further boost economic ties.
  • Growth and development
    Developing manufacturing clusters will help in growth of domestic economy and is very crucial for $5 trillion economic goal of India. The move will also generate employment for youth and help in creating economic assets.


India has already introduced new Electronic manufacturing policy that aims to attract manufacturing industries trying to relocate to India or set up new units. On similar lines, this policy can be expanded to other sectors.

Thus, the subsidy program of Japan must be efficiently utilised for attracting major manufacturing firms of Japan. This will also benefit towards a self sufficient India.

Updated on 10 Sep 2020 |   Added on .07 Sep 2020  |  by admin