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Foxconn, Nokia, 29 others get DoT nod for telecom PLI

The scheme for telecom gear manufacturing in India is expected to encourage the production of equipment worth Rs 2.44 lakh crore and create direct and indirect employment for about 40,000 people.

By: ENS Economic Bureau | New Delhi |
Updated: October 15, 2021 12:09:12 am
The investors can earn an incentive for incremental sales up to 20 times the committed investment, enabling them to reach global scales and utilise their unused capacity and ramp up production. (File)

The Department of Telecommunications (DoT) on Thursday approved production-linked incentive (PLI) scheme proposals of 31 companies including global conglomerates such as Foxconn, Jabil, Nokia, Rising Star and Commscope for production of telecom and networking products in India.

Domestic micro, small and medium enterprise (MSME) companies such as Coral Telecom, STL, Lekha Wireless Solutions, Systrome, Synegra’s plan for the telecom equipment manufacturing PLI were approved, while the plans submitted by Dixon, Tejas Networks, VVDN Technologies, among others, were given the go ahead in non-MSME sector.

The government expects an investment of Rs 3,345 crore in the PLI scheme over the next 4-5 years, with incremental sales of up to Rs 1.82 lakh crore during this period, which are likely to create 42,000 job opportunities, an official release by the DoT said.

Earlier this year in February, the Union Cabinet had approved a Rs 12,195-crore PLI scheme for domestic manufacturing of telecom and networking products such as switches, routers, radio access network, wireless equipment and other internet of things (IoT) access devices.

Eligible MSMEs will get an incentive of 7 per cent for the first and the second year, followed by an incentive of 6, 5, and 4 per cent in the third, fourth and fifth year, respectively.

Other companies, which do not fall under the MSME category but are eligible, will receive an incentive of 6 per cent for the first two years, 5 per cent for the next two years and 4 per cent in the fifth and final year.

Explained

How does the scheme work?

Like the other production-linked incentive (PLI) schemes, the incentives for companies in the telecom and networking equipment manufacturing space would be on achievement of a minimum threshold of cumulative incremental investment and incremental sales of manufactured goods net of taxes.

The minimum investment threshold for MSMEs has been kept at Rs 10 crore, while for other companies it has been kept at Rs 100 crore. The scheme, which will be operational from April 1, will run over the next five years with a total outlay of Rs 12,195 crore for providing these incentives.

Like the other PLI schemes, the incentives for companies in the telecom and networking equipment manufacturing space would be on achievement of a minimum threshold of cumulative incremental investment and incremental sales of manufactured goods net of taxes.

In April last year, the Central government had for the first time notified the PLI scheme for mobile phones and allied component manufacturing. As part of the scheme, companies that set up new mobile and specified equipment manufacturing units or expanded their present units would get incentives of 4 to 6 per cent, with the total outlay for the scheme amounting to Rs 41,000 crore.

In November, the PLI scheme was expanded to include 12 more sectors such as automobile and automobile components, pharmaceutical drugs, textile products, food products, high efficiency solar photovoltaic modules, white goods such as air conditioners and LED bulbs, and speciality steel products. Finance Minister Nirmala Sitharaman hadsaid in the Budget for 2021-22 that the total outlay for PLI schemes in these 13 sectors over the next five years would be Rs 1.97 lakh crore.

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