The Prime Minister, Shri Narendra Modi addressing at the dedication to the nation and foundation laying of key projects of the Oil and Gas sector in Tamil Nadu, via video conferencing, in New Delhi on February 17, 2021. (Photo Courtesy: Press Information Bureau)

The Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi, has approved the Production Linked Incentive (PLI) Scheme for Telecom and Networking Products with a budgetary outlay of Rs. 12,195 crores.

The Production Linked Incentive (PLI) Scheme intends to promote the manufacturing of Telecom and Networking Products in India and proposes a financial incentive to boost domestic manufacturing and attract investments in the target segments of telecom and networking products to encourage Make in India. The scheme will also encourage exports of telecom and networking products ‘Made in India’.

Support under the scheme will be provided to companies/entities engaged in the 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 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.

Globally, Telecom and Networking Products exports represent a $100 billion market opportunity, which can be exploited by India. With support under the scheme, India will augment capacities 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.

In continuation of “Atmanirbhar Bharat-Strategies for enhancing India’s Manufacturing capabilities and enhancing exports”, this scheme is part of the umbrella scheme approved by the cabinet in November 2020 for implementation of PLI under various Ministries/ Departments including the Department of Telecommunications (DoT).

There will be a minimum investment threshold of Rs.10 crores for MSME with incentives from 7% to 4 % and Rs. 100 crores for others with incentives from 6% to 4 % over 5 years above Base Year. The applicants with higher investments than the specified threshold under MSME and Non-MSME categories will be selected through a transparent process.

With this scheme, India will be well-positioned as a global hub for the manufacturing of Telecom and Networking Products. Incremental production of around Rs. 2 Lakh crore is expected to be achieved over 5 years. India will improve its competitiveness in manufacturing with increased value addition.

It is expected that the scheme will bring more than Rs. 3,000 crore investment and generate huge direct and indirect employments.

Through this policy, India will move towards self-reliance. By incentivizing large-scale manufacturing in India, domestic value addition will increase gradually. The provision of higher incentives to MSME will encourage domestic telecom manufacturers to become part of the global supply chain.