08 Dec Department of Telecom to seek Cabinet nod on PLI scheme guidelines for telecom gear
NEW DELHI: The Digital Communications Commission, highest decision-making body of the Department of Telecommunications (DoT), has approved the nearly Rs 12,200 crore Production Linked Incentive (PLI) scheme guidelines for equipment manufacturing.
The DoT will seek a final approval from the Union cabinet in the coming weeks, followed by invitation of applications from companies, which could start from January 2021, said people aware of the matter.
The cabinet recently approved the broader PLI scheme worth Rs 12,200 crore to boost local manufacturing of telecom gear for both the domestic market and exports. The scheme will cover core transmission equipment, 4G/5G and next-generation radio access network and wireless equipment, access and customer premise equipment (CPE), Internet of Things (IoT) access devices and enterprise equipment such as switches and router, said people directly involved in framing the policy.
Additionally, the policy will drive Intellectual Property (IP) and design-led manufacturing so that the industry could compete globally, besides focusing on leveraging the research and development pool and talent in the country.
However, the government has rejected demands of European gear vendors Nokia and Ericsson to include their existing manufacturing related investments under the policy, said the people.
Sanjay Nayak, CEO of Tejas Networks, a domestic telecom gear maker, said the scheme can encourage local manufacturing of even chips used in telecom equipment. “Semiconductors, fabless chips, systems, accessories – we have opportunities in this space,” he said.
Industry bodies had previously said that the scheme could result in Rs 2 lakh crore of production over the next five years, as it would speed up India’s emergence as a global 5G gear manufacturing hub, boost network gear exports and create a robust components ecosystem.
“We have our three bigger global sites. Some of them are global where we do new product introductions on those sites. India is a site where we look at expanding those activities because of the importance of the Indian market and we’re going to closely look for opportunities to expand that into other sort of export markets from India as well,” Fredrik Jejdling, head of Business Area Networks at Ericsson, told ET.
However, a few executives expressed scepticism about the scheme mirroring the success of a similar plan which kicked off recently with an aim to boost local handset manufacturing.
According to an industry executive, the secret for the success of the handset PLI scheme was that there were many mobile handset makers who wanted to set up factories for production in India. “The demand for mobile handsets can be scaled up and the same kind of interest cannot be said for the global firms in the telecom equipment space,” said the executive, who did not wish to be identified.
Earlier, the government had approved the applications of 10 mobile phone manufacturing companies including five foreign companies – Samsung, Foxconn units Hon Hai and Rising Star, Wistron and Pegatron – for availing incentives under the PLI scheme totalling about Rs 41,000 crore to be disbursed over five years.