Telecom related PLI scheme spurs employment & innovation

The PLI scheme introduced for the telecom sector has provided a significant push to Atmanirbhar Bharat and Make in India initiatives, especially in the telecom manufacturing ecosystem.

February 18, 2021

Atmanirbhar Bharat 3.0 introduced the US$ 1.67bn as Production Linked Incentives.

This shall facilitate investment of US$ 412.24 mn and domestic production of US$ 33bn.

It will facilitate exports worth US$26.8bn and around 40,000 jobs in the next 5 years.

This PLI will provide a significant fillip to the country’s EoDB and Make in India initiative.

In a significant move not only for the telecom industry, but for the Atmanirbhar Bharat initiative too, the Government of India disclosed the details regarding the US$ 1.67 bn PLI scheme for the telecom sector which was introduced as part of the Atmanirbhar Bharat 3.0 package. This aims to facilitate investment of more than US$ 412.24 mn and domestic production of US$ 33bn. The PLI scheme will hopefully encourage exports worth US$26.8bn, 40,000 employment opportunities and tax revenue worth US$ 2.34 bn in the next 5 years, as stated by the Minister of Communication and IT Shri Ravi Shankar Prasad.

Currently telecom equipment worth US$ 6.87 bn is being imported from China. This has given rise to several security concerns especially with Chinese vendors like Huawei and ZTE, providing India with a paradigm shift towards self-reliance. This PLI scheme, effective from April 1 is designed to boost the growth of MSMEs by supporting locally manufactured products, thereby reducing the dependence on foreign goods. Consequently, there will be a boost in exports of various types of equipment including routers, IoT access devices, radio access networks for 4G and 5G and wireless equipment. This scheme will ensure that the MSMEs will play a key role in the telecom sector too. For MSMEs a 1% higher incentive is proposed in the first three years and the minimum investment threshold for them has been fixed at US$ 1.37mn, whereas for others it has been kept at US$ 13.7 mn.

With the second largest telecom market, India is perfectly poised to become a global hub for telecom innovation and manufacturing. With India’s advancement in the field of 5G, and software being one of her strengths, the nation needs to concentrate on its hardware sector. This PLI will provide a fillip to component manufacturing in the country, giving the right impetus to the telecom manufacturing ecosystem in the country, giving a major boost to Make in India, creating a conducive environment for India’s ease of doing business.