Global & Local Firms Gear Up for PLI Scheme

The renowned global telecom equipment manufacturers such as Nokia, Cisco, Ericsson, Jabil, and contract manufacturer Flex and Foxconn are expected to apply for the Rs.12,195-crore production-linked incentive scheme for the sector, as announced by the government last week.

Industry sources states formal applications from these manufacturers were likely once the department of telecommunications that announces the final guidelines. Tejas Networks and HFCL are among the local players that have evinced interest; the government is looking forward for more to follow suit.

However, the guidelines would now specify how the global and local players would be selected. For the mobile phones PLI scheme, five global and five local companies have been chosen. The PLI scheme for telecom equipment is designed to offer incentives, to the chosen firms, for incremental production over the base year.

Through these incentives, the government is trying to cut down the imports, boost domestic production, increase employment and export competitiveness.

The scheme is expected to be operational from April 1, and would lead to incremental production of around Rs.2.4 lakh crore with exports of around Rs.1.95 lakh crore over five years. Sources in the government has stated that the scheme is expected to create 40,000 jobs, revenues of around Rs.8,500 crore in direct taxes and Rs.8,700 crore in indirect taxes like GST. It is expected to bring in investments of over Rs.3,000 crore.

Telecom equipment that would be covered includes core transmission equipment, 4G/5G next generation radio access network and wireless equipment, access and customer premises equipment (CPE), Internet of things (IoT) access devices, other wireless equipment and enterprise equipment like switches, routers etc.

The scheme is expected to offset huge imports of telecom equipment worth more than Rs.50,000 crore and reinforce it with Made in India products both for domestic markets and exports.