DoT rallies behind PLI expansion for telecom equipment

The Department of Telecommunications (DoT) is advocating for an expansion of the Production Linked Incentive (PLI) scheme for telecom equipment and network products to boost domestic manufacturing and capture the growing export demand for 4G and 5G technology. This expanded scheme will be a key focus for the DoT during upcoming pre-Budget inter-ministerial discussions, with officials emphasizing the need for updates to attract new investments.

By September, the 42 recipients of the scheme had already invested Rs 3,925 crore out of the Rs 4,115 crore they initially pledged. Additionally, the initiative has generated 24,980 new jobs, with expectations for a substantial rise in employment as the program is enhanced and expanded.

The DoT reports a 60% reduction in telecom product imports due to the PLI scheme, with India achieving near self-sufficiency in areas such as antennas, Gigabit Passive Optical Network (GPON) gear, and customer premises equipment (CPE) like IoT devices. The government continues to target the export of a full range of domestically developed 4G and 5G solutions by 2024, as demand for optical equipment, switches, and routers grows internationally.

This initiative aligns with India’s broader strategy to attract foreign investments and promote its telecom technology on the global stage. Several countries, including Kenya, Mauritius, and Egypt, have already expressed interest in India’s telecom offerings.

Launched in 2021 with a financial allocation of Rs 12,195 crore for five years, the PLI scheme includes 42 companies, 28 of which are MSMEs. It covers equipment for core transmission, 4G/5G networks, and enterprise solutions like switches and routers. Stakeholder consultations on expanding the PLI scheme are set to begin soon.

Companies had previously raised concerns about high targets for the initial year (2021-22), with the current scheme requiring companies to meet global revenue thresholds to qualify. For MSMEs, a minimum investment of Rs 10 crore is required, while non-MSMEs must invest at least Rs 100 crore. The scheme also stipulates increased sales of manufactured goods relative to a base year (FY19-20), and the allocation for MSMEs has been increased from Rs 1,000 crore to Rs 2,500 crore.