The Japanese government is offering its companies incentives to shift manufacturing bases out of China either back home or to India or Bangladesh.
New Delhi is keen to wean some of them here and is reaching out to them to facilitate their entry, officials said. “We are in touch with Japanese investors,” a senior government official told ET. “Engagement with them is going on at various levels.”
The government has drawn up a list of all the Japanese companies and is reaching out to them. Three categories of companies have been identified as part of the exercise.
The first category consists of companies not present in India. The second list is of companies that have just one business vertical in the country while other verticals are in China. The third is of those companies that have manufacturing here but can expand capacity further.
Those in the first list include auto companies Mazda and Subaru, sports retail and ecommerce company Mizuno, textiles companies Descente and Unitika, and railcars maker Japan Transport Engineering Company.
Japan has allocated about $221 million subsidy to encourage companies to relocate their manufacturing from China for 2020. Japanese supply chains are currently heavily dependent on China.
India has formed a high-level group chaired by cabinet secretary to draw up a phased manufacturing plan and incentive schemes to attract foreign investments in manufacturing of mobile and electronics, medical devices, and pharmaceutical drugs.
The group, comprising secretaries of key ministries and departments including the Department for Promotion of Industry and Internal Trade (DPIIT), has also been mandated to identify potential investors and organisations across key sectors and geographies with the capacity to invest in India or enter into joint ventures with Indian companies.
A national repository of landbank has been set up to provide ready access to availability of land and resources in the country.
Japan is the fourth biggest investor in India. Its total cumulative equity foreign direct investment (FDI) into India is nearly $200 billion, 7% of the total flows and more than that from the US and UK.