Telecom PLI: TechM, Sterlite Likely to be Rejected; 33 Set to Make Cut

TelecomThe government has shortlisted 33 companies that would be awarded benefits under the Rs 12,195-crore production-linked-incentive (PLI) scheme for telecom and networking equipment even as the applications of Tech Mahindra, Sterlite Technologies and Kenstel Networks are likely to be rejected on technical grounds.

The scheme, which was notified on February 24 this year, has received 36 applications, of which three are being rejected, according to a source. The winners — who would be notified soon — have committed Rs 3,455 crore as proposed investments.

Of the ‘global’ companies that have applied, seven out of the eight applicants have made the cut and these are Taiwanese 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), sources told TOI.

On the domestic side, 26 companies have made the cut, nine large ones, and 17 in the MSME category. The Indian companies include Akashastha Technologies (proposed investment Rs 593 crore), VVDN Technologies (Rs 400 crore), Neolync Tele Communications (Rs 188 crore), Dixon Electro Appliances (Rs 180 crore), ITI (Rs 120 crore), Tejas Networks (Rs 111 crore), GDN Enterprises (Rs 46 crore) and STL Networks (Rs 49 crore).

The application of Sterlite Technologies, filed under the ‘global’ companies category, is being rejected for falling short of the minimum threshold criteria of Rs 10,000-crore revenue. “In the certificate for global revenue, the company has taken the revenue of ‘Vedanta’. It is also mentioned in the certificate by the applicant that the said revenue is not from electronic, IT/ITeS, including software, telecom and networking segment. If Vedanta’s revenue is excluded, the global revenue stands at Rs 5,180 crore, which is lower than the minimum threshold of Rs 10,000 crore for global companies,” a source said

On the domestic side, the application of Tech Mahindra is also being rejected as it is not engaged in the manufacturing of telecom equipment, but only in software. “The company has applied for product, namely ‘software development’ in category ‘any other product’, as decided by empowered group of secretaries. The scheme only envisages manufacturing of goods, and ‘software’ is not covered under specified ‘telecom and networking products’ category,” the source said.
Kenstel Networks, which has applied under MSME, has certified its revenues at Rs 6.4 crore, which is less than the stipulated Rs 10 crore threshold mandated for the category. The government had floated the scheme to encourage domestic manufacturing in the telecom sector, including core transmission equipment, 4G/5G next-generation Radio Access Network, IoT access devices and enterprise products such as switches and routers.

The government feels that with the transition to 5G and other futuristic technologies, India should have a robust, manufacturing eco-system.

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