The Production Linked Incentive Scheme for Promoting Telecom & Networking Products Manufacturing in India has been launched to align with the vision of Atma Nirbhar Bharat to reduce India’s dependence on other nations for the import of telecom and networking products. The scheme was launched by the Department of Telecommunications, Ministry of Communications to boost domestic manufacturing in telecom and networking products by giving incentives in support to promote world-class manufacturing in India. The total outlay of the scheme is Rs. 12,000 crores and the scheme is effective from 1st April 2021. Support under the scheme is provided for 5 years until 2025-26.
Applications need to comply with minimum revenue criteria for eligibility under the scheme. Applicant firms may decide to invest in single or multiple eligible products. The scheme requires a minimum investment threshold of Rs. 10 crores for MSME and Rs. 100 crore for non-MSME applicants. The investment will not include any land or building costs and is further subject to incremental sale of manufactured goods.
Objectives of the scheme
The scheme’s target segment includes core transmission equipment (Optical Transport Network, Gigabit Passive Optical Networks, Digital Microwave Radio), access and customer premises equipment (CPE), Internet of Things (IoT) access devices, 4G or 5G next-generation radio access network and wireless equipment( Long Term Evolution Radio Access Network Base Station and Core Equipment, Wireless Telecommunication Equipment in access and backhaul), and other wireless equipment and enterprise equipment like switches, routers, Internet Protocol, packet switching and routing apparatus, products as decided by eGoS, etc.
As of October 2021, 31 companies are eligible for this scheme and have been given approval by the government under the PLI scheme for telecom and networking products comprising 16 MSMEs and 15 non-MSMEs, of which 8 are domestic and 7 are global companies.
Some eligible companies are Coral Telecom Limited, Surbhi Satcom Private Limited, Tejas Networks Limited, Rising Stars Hi-tech Private Limited, and more. These companies are expected to invest and generate incremental employment of more than 40,000 people with an expected incremental production of around Rs. 1.8 lakh crore. This will boost domestic research and development of new products on which 15% of committed investment could be invested. According to the Department of Telecommunications, full utilization of the scheme funds is expected to result in an incremental production value of approximately Rs. 2.4 lakh crore and exports worth Rs. 2 lakh crore over the next five years.
The scheme has been well received by global parties. Supporting initiatives have been taken by the government and private players and thus the PLI scheme for Telecom will contribute to establishing a vibrant ecosystem for cutting edge technology and manufacturing in India, benefiting both domestic and global players. This will create a win-win situation and contribute to the growth of the economy of India.
This will also boost Make in India and Digital India initiatives, creating global champions in India who have the potential to grow in size and scale using cutting-edge technology and penetrate global value chains.