“PLI scheme can be further strengthened by eliminating caps on R&D investments”

Tejas is one of the early entrants in the domestic manufacturing sphere. In a quick chat with Voice&Data, Sanjay Nayak, MD & CEO Tejas Networks shares his views on making in India and Aatmanirbhar. Excerpts.

By Sanjay Nayak

What is Tejas’ current status in manufacturing from India in terms of products and equipment covered under the PLI scheme?

Tejas is among the pioneers of Make In India for the last 20 years. We do all our R&D as well as manufacturing in India. Every product that we manufacture is covered under the PLI scheme for telecom and networking products.

What are your views on the Make in India / Aatmanirbhar Policies?

Over the last few years, we have seen a strong intent by the Government to take a holistic approach to become truly Aatmanirbhar in the strategically important telecom sector. Policies such as PMI (Preference to Make in India), PLI for Telecom and Networking, and recent new policies — such as Design-led manufacturing for 5G, use of 5% of USO funds for R&D, and most recently the PLI scheme for semiconductor fabs — are welcome steps. The emphasis now is clearly on promoting indigenous R&D and design-led manufacturing so that the country has full control of hardware (system design, chips, and components) as well as software, and there can be a higher amount of domestic value-addition.

In the implementation of these policies, some fine-tuning is needed to make them more effective and aligned to the industry’s needs.

What has the Tejas performance been like in the past few years in both the domestic and export markets?

2021 was a good year for Tejas and we ended the calendar year with the largest order book in our company’s history. In India, we were selected as a GPON equipment supplier for multiple regional and pan-India FTTx rollouts. Besides FTTX, we were selected by Airtel to supply our state-of-the-art multi-terabit OTN/DWDM products for their Metro capacity expansion for 5G.

The company continued to be a preferred telecom equipment vendor in India’s critical infrastructure sector and won multiple contracts in the power sector, railways, and smart and safe city tenders.

We continued to execute our strategy to grow the international business and register new business wins in Africa, South East Asia, and the Americas.

We are also excited about our association with Tata Sons, which acquired a majority stake in Tejas Networks through their subsidiary Pantone Finvest. This is expected to give us global brand recognition, a solid balance sheet, and access to large customers worldwide. We hope that with this strategic move, we can significantly accelerate our efforts to build a world-class top-tier global telecom OEM from India.

You mentioned improvements in the PLI. What would be your suggestions?

The current PLI scheme can be further strengthened by eliminating caps on R&D investments and on manpower costs. Manpower costs used for capital R&D investments must be given full credit. Similarly, the PMI policy should be strictly enforced for all turnkey projects. If any domestic products are available in the country, these must be preferred over imported products. For strategic projects in defense, railways, power, homeland security, etc., we must explicitly focus on promoting indigenous equipment and avoid setting technical tender conditions which disqualify Indian products.

To promote design-led manufacturing and domestic value-addition (and in turn R&D), a higher PLI incentive should be given when both design and manufacturing are done in India.

Nayak is MD & CEO,  Tejas Networks

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