The government of India announced the Production Linked Incentive (PLI) scheme to boost the manufacturing sector in the country. The aim was to provide enough incentives to multinational corporations (MNCs), so they get motivated to set up manufacturing plants in India.
The PLI scheme was extended to several sectors, including the telecom industry. On February 24, 2021, the government announced the PLI scheme for telecom and networking products outlaying benefits of Rs 12,195 crores.
This was to motivate telecom gear manufacturers for coming to India and produce equipment locally for the telcos. Since there is no prime local telecom gear manufacturing company in India, the telcos have to rely on global players such as Ericsson, Huawei, Nokia, Samsung, and more for purchasing equipment.
This leads to more imports for the country. The PLI scheme is aimed at changing this. As per PTI, The Department of Telecommunications (DoT) is expected to release the guidelines for the implementation of the PLI scheme for the telecom sector this week and also start inviting applications from companies that are interested in taking part in it.
Companies such as Nokia, Ericsson, Cisco, Foxconn, and Samsung have shown interest in being a part of the scheme. It would be beneficial for the telcos if these companies start producing gear locally since they would be able to purchase it at a lower cost because of no import or customs charges.
The PLI scheme for the telecom sector is already approved by the government, and the DoT has readied the guidelines for implementation. The DoT’s website should reflect the guidelines very soon.
The scheme for telecom gear manufacturing is, directly and indirectly, going to create jobs for up to 40,000 people in the country. The Indian government is also about to earn hefty taxes of about Rs 17,000 crores on the backing of this scheme. Total investments that the PLI for the telecom sector will bring is estimated to be Rs 3,000 crores.