A week before an India-Japan summit, Japan’s ministry of economy, trade and industry announced it would add India and Bangladesh to a list of Asean countries to qualify for subsidies for Japanese manufacturers moving out of China. The METI announcement comes days after India, Japan and Australia decided to advance cooperation on building trusted, resilient supply chains.
PM Narendra Modi and Shinzo Abe, the outgoing Japanese prime minister, will hold their last virtual summit on September 10. The two countries are expected to sign the ACSA (Acquisition and Cross Servicing Agreement) which will allow military services of both countries to share logistics. (India signed a similar pact with Australia in June). It will be a fitting note to Modi’s last meeting with Abe before the Japanese leader steps down given their rapport and the big steps in bilateral cooperation taken during their tenures.
The summit comes when India and Japan are locked in separate tensions with China.
The SCRI (Supply Chains Resilience Initiative) is intended to build alternative supply chains. At a trilateral meeting with trade ministers of Australia and Japan, commerce minister Piyush Goyal said, “Diversification of supply chain is critical for managing risks associated with supply of inputs, including disciplining price volatility. We could provide the core pathway for linking value chains in the region .”
The announcement by the Japanese government will shift the onus on India to attract Japanese companies seeking alternatives to China.
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