The central government’s Production Linked Incentive scheme is touted to be one of the propellors of production of telecom equipment in the country in the coming years. In an environment where the Chinese telecom manufacturers are looked at with raised eyebrows and the European ones are considered too costly given the industry’s current situation, domestic production seems to be the way out. This is the reason why DoT invited proposals from both international and domestic manufacturers, and it seems the interest of companies has far expected the DoT’s estimation.
DoT's Target Exceeded by Telecom Makers' Interests
The DoT’s target was set at Rs 3,000 crore of investment from these telecom equipment manufacturers, including both international and domestic companies. However, it seems that as many as 36 companies, including both the groups, are ready to make an investment of Rs 4,500 crore in the sector and have applied to the DoT for the same. The earmarked funds include Rs 12,195 crore for micro, small & medium enterprises (MSME). This fund will be given to the companies over the period of 5 years and not all at once. This scheme includes components like interest subvention.
Both International and Domestic Telecom Manufacturers Apply
Nokia, Ericsson, through its vendor Jabil, Foxconn’s Rising Star, Sanmina, Sterlite Technologies, and Cisco, were the ones who applied under the foreign companies tag for the PLI. Missing from this list was one big name of Samsung, which is the telecom equipment provider for Reliance Jio. In the domestic manufacturer's category, companies like HFCL, Tejas, Tech Mahindra, Akshata, a Tata Consultancy Services company, VVDN Technologies, and Dixon Technologies applied for Rs 457 crore assistance.
The PLI scheme is aimed at reducing the import expenses which the Indian companies incur; this includes a Rs 50,000 crore bill every year on telecom equipment. As per the DoT’s estimate, this investment by the companies will generate Rs 2 lakh crore over the course of the next five years in exports. As for the recent applications, SIDBI is doing due diligence.