India bags two Japanese projects to strengthen Japan’s global supply chain outside China
NEW DELHI: India has become the first country outside the ASEAN network where the Government of Japan would financially support two Japanese companies to undertake projects for strengthening its overseas supply chains, which had got disrupted due to the Coronavirus pandemic.
The Japan government’s overseas trade development agency Japan External Trade Organization (JETRO) has approved the two projects for India in the field of rare earth and automobile keyless entry system.
“JETRO will support two pilot projects and feasibility studies in India for strengthening overseas supply chains. The program mainly targets ASEAN countries. However, the two projects concerning rare earth and automobile keyless entry system were chosen from India, the first country outside ASEAN to be awarded under the JETRO’s program,” said a statement by Embassy of Japan in India.
“Japan and India have been partnering to strengthen the supply chain resilience and India’s industrial competitiveness. These two projects are one of their manifestations,” it added.
It may be recalled that in April this year, the former Prime Minister Shinzo Abe-led Japanese government has taken the decision to allocate an economic stimulus package of $2.2 billion to help its manufacturing firms shift production out of China, where supply chains have been disrupted due to coronavirus outbreak. Out of $2.2 billion, the Japanese government had proposed to allot 220 billion yen ($2 billion) to firms for shifting production back to Japan and 23.5 billion yen to companies seeking to move manufacturing base to other countries.
According to JETRO, of the total 21 adopted projects, the two projects are from India. 19 of these projects would have their origin in ASEAN.
“The above two projects are the first projects which have been adopted from outside ASEAN. India is the only country outside ASEAN where projects are adopted at this moment. Japan and India have been working together to strengthen the supply chain resilience and India’s industrial competitiveness. These two projects can promote such policy objectives between India and Japan,” said a JETRO statement.
The two approved projects fall under Proof of Concept (PoC) and Feasibility Studies (F/S) categories. Toyota Tsusho Co. will execute the PoC project for rare earth oxides/carbonates mainly used for automobiles /auto parts, and Sumida Electric Co. Ltd. will undertake F/S project for antenna for automobile keyless entry systems and coils for ABS (Anti-lock Braking System) in India.
JETRO provides financial support to those Japanese companies’ activities, which are conducted for Japanese companies’ product development and value chain upgrading activities, aiming to contribute towards the diversification of production bases and the strengthening of supply chains between ASEAN and Japan.
“In this program, JETRO provides financial support to those Japanese companies’ activities which contribute to strengthening supply chains between ASEAN and Japan. As long as the activities conform to this objective, projects based in other countries are eligible under this Program,” said a statement.
