PLI Boost: Telecom Gear Makers Log Rs 6,200 Crore Production

PLITelecom equipment makers have produced more than Rs 6,200 crore worth of products with an investment of close to Rs 247 crore since the launch of the production-linked incentive (PLI) scheme for the segment, a senior government official said.

“We will soon announce the progress on the equipment production; things are good.

The production and investment have so far been driven by large multinational players such as Ericsson and Nokia, with Indian companies having sought an extension to meet their targets, saying they have received just four months to meet the first-year milestones.

Large Indian manufacturers have invested Rs 86 crore, while the remaining Rs 9.7 crore of investment was from MSMEs.

On the production side, the official said, the global players accounted for Rs 5,471 crore of production so far, while the large Indian companies contributed Rs 641 crore to the total. MSMEs accounted for the balance Rs 122 crore.

As reported last month, multinational vendors Nokia and Ericsson were on track to meet targets of the first year of the PLI scheme for telecom and network equipment manufacturers and had not sought an extension of the timelines.

But a number of domestic and multinational contract manufacturers had written to the telecom department, both directly and through the industry body the Cellular Operators Association of India, seeking a year’s extension to meet targets under the scheme.

The PLI scheme, which aims to make India a telecom equipment manufacturing hub by attracting global investments as well as nurturing homegrown companies, kickstarted on April 1, 2021, and will be in effect till 2025-26.

The telecom department had approved 31 proposals under the scheme, entailing investments of Rs 3,345 crore over four-and-a-half years. The companies selected for the PLI scheme included Nokia India, Ericsson’s Jabil unit, HFCL, Dixon Technologies, Flextronics, Foxconn, Coral Telecom, VVDN Technologies, Tejas Networks Akashastha Technologies and GS India.

The department notified the PLI scheme on February 24 2021, with a financial outlay of Rs 12,195 crore over the five years.

The scheme offers incentives in the range between 4% and 7% for different categories and tenures. For MSMEs, a 1% higher incentive is proposed in year one, year two and year three.

The financial year 2019-20 will be treated as the base year for computation of cumulative incremental sales of manufactured goods net of taxes.

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