Government shortlists 33 companies to grant benefits under PLI scheme

Earlier this year, in February, the scheme was notified and had received 36 notifications from both domestic and global enterprises.

September 6, 2021

The scheme was introduced with the aim of furthering domestic manufacturing in the telecom sector.

The selected companies include 26 domestic organisations and 7 global organisations.

A minimum threshold criteria of US$1.36 billion revenue is the main criterion in the selection of the shortlisted companies.

The government considers the 5G transition and the introduction of other futuristic technologies vital in creating a robust manufacturing eco-system in India.

Under the Production Linked Incentive (PLI) scheme for telecom and networking equipment amounting to US$1.66 billion, 33 companies out of 36, have been shortlisted by the government for granting benefits, in light of the scheme’s notification earlier this year. While three of them, namely Tech Mahindra, Sterlite Technologies and Kenstel Networks are being rejected on technical grounds, the winners have committed US$ 470.5 million as proposed investments. A total of 26 domestic companies were selected under the scheme, with 9 large companies and 17 MSMEs. Globally speaking, 7 out of the 8 companies which had applied were selected,which include the Taiwanese firm Foxconn (proposed investment Rs 208 crore), Rising Stars Hi-Tech (Rs 125 crore), Finnish Nokia Solutions (Rs 125 crore), American makers Flextronics (Rs 102 crore), Jabil Circuit (Rs 176 crore), CommScope (Rs 209 crore), and Sanmina-SCI (Rs 110 crore). The domestic companies include Akashastha Technologies (proposed investment Rs 593 crore), VVDN Technologies (Rs 400 crore), Neolync Tele Communications (Rs 188 crore), Dixon Electro Appliances (180 crore), ITI (Rs 120 crore), Tejas Networks (111 crore), GDN Enterprises (Rs 46 crore) and STL Networks (Rs 49 crore).

The PLI scheme was introduced by the government with the aim to encourage and support domestic manufacturing in the telecom sector, including the equipment for core transmission, 4G/5G next-generation Radio Access Network, loT access devices and enterprise products such as switches and routers. Under the ‘global’ category, Sterlite Technologies’ application is getting rejected as it does not meet the minimum threshold criteria of US$ 1.36 billion revenue. While it mentions that the revenue has been taken from ‘Vedanta’, it’s applicant’s certificate mentions that the said revenue is not from the electronic, IT/ITes, including software, telecom and networking segments. The global revenue stands at ₹5,180 crore excluding Vedanta’s revenue. Domestically, Tech Mahindra is being turned away owing to its lack of engagement with telecom equipment manufacturing except software, since the scheme only specifies the manufacturing of ‘goods’, a category in which software isn’t included under the ‘telecom and networking products’ sub-section.

Responding to Hon’ble PM Modi’s clarion call of evolving into an “Atmanirbhar Bharat”, the transition to 5G and other futuristic technologies is believed to be pivotal in creating a vigorous and strong manufacturing eco-system for a new and self-reliant India.