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The initiative is likely to generate 40,000 direct and indirect job opportunities and tax revenue of Rs 17,000 crore from telecom equipment manufacturing.
V&D Bureau
Following the success of its production linked incentive (PLI)-scheme for mobile and component manufacturing, the Government of India has approved the PLI scheme for telecom and networking products with an outlay of Rs 12,195-crore over five years. Announcing this after the Union Cabinet meeting, Communications Minister Ravi Shankar Prasad said that the move will help improve ease of doing business in the country. He also noted that the PLI scheme will position India as a hub of global suppliers of telecom equipment.
“The scheme is aimed at offsetting the huge import of telecom equipment worth more than Rs 50,000 crore and reinforce it with Made in India products both for domestic markets and exports,” the minister said. The government had, in November 2020 rolled out the PLI scheme for large-scale electronic goods makers for five years, and has so far attracted Rs 34,000-crore investment from some of the top mobile companies.
The implementation of the PLI scheme will start from April 2021. According to Prasad, while the PLI scheme is primarily aimed to cut import dependence, it will encourage domestic telecom infra makers as well and generate more than 40,000 direct and indirect employment opportunities and generate tax revenue of Rs 17,000 crore from telecom equipment manufacturing, including core transmission equipment, 4G/5G radio access network and wireless equipment, access and customer premises equipment, internet of things access devices, other wireless equipment and enterprise equipment such as switches and routers.
The minimum investment threshold needs to be at least Rs 100 crore for large industries and Rs 10 crore for MSMEs. The Incentive will be 1% higher for MSMEs to promote healthy competition and can reach up to 20 times the amount of investment at the start to realize their full potential, a PIB release from the ministry stated.
“Support under the Scheme will be provided to companies/entities engaged in manufacturing of specified telecom and networking products in India. Eligibility will be further subject to the achievement of a minimum threshold of cumulative incremental investment over a period of four years and incremental sales of manufactured goods net of taxes (as distinct from traded goods) over the base year 2019-2020. The cumulative investment can be made at one go, subject to the annual cumulative threshold as prescribed for four years being met,” the release stated.
The telecom and networking products exports market worldwide stands at USD 100 billion and the Government of India is looking at augmenting the country’s capacity by attracting large investments from global players and at the same time encourage promising domestic champion companies to seize the emerging opportunities and become big players in the export market.
“With this scheme, India will be well-positioned as a global hub for manufacturing of telecom and networking products. Incremental production of around Rs 2 lakh crore is expected to be achieved over five years. India will improve its competitiveness in manufacturing with increased value addition,” the release said, adding that PLI is likely to bring more than Rs 3,000-crore investment and generate huge direct and indirect employments in the country.
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