October 27, 2021

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Govt launches PLI scheme for telecommunication manufacturing

Govt launches PLI scheme for telecommunication manufacturing

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

The government on Thursday launched the production linked-incentive (PLI) scheme for telecom manufacturing, under which 31 global and local companies will undertake incremental production worth Rs 1.82 lakh crore over five years.

The objective of the PLI scheme is to boost domestic manufacturing in the telecom and networking products by incentivising incremental investments and turnover with total outlay of Rs 12,195 crore. The scheme is effective from April 1, 2021. Investment made by successful applicants in India from April 1, 2021, onwards and up to FY 2024-25 shall be eligible, subject to qualifying incremental annual thresholds. The support under the scheme shall be provided for a period of five years, ie, from FY 2021-22 to FY 2025-26.

Notable companies selected under the include Flextronics, Foxconn, Jabil, Nokia, Rising Star, Dixon Technologies, VVDN Technologies, Tejas Networks, HFCL, ITI, Coral Telecom and Lekha Wireless, among others. Overall, a total of 31 companies, comprising 16 MSMEs and 15 non-MSMEs (8 domestic and 7 global companies) have been selected.

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The scheme was launched by Devusinh Chauhan, minister of state for communications.

Speaking during the occasion, he said, the scheme has been launched to realise the Prime Minister’s vision of Atmanirbhar Bharat. It will help in reducing India’s dependence on other countries for import of telecom and networking products. He called upon the industry leaders to focus on making high quality products and expressed the commitment to provide incentives and support to promote world-class manufacturing in the country.

As per commitments given by applicants, these 31 applicants are expected to invest Rs 3,345 crore in the next four years and generate incremental employment of more than 40,000 people. It is expected that an incremental production of around Rs 1.82 lakh crore will happen over the scheme period. The scheme is expected to boost domestic research & development of new products on which 15% of the committed investment could be invested.

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The scheme offers incentives in the range between 4% and 7% for different categories and tenures. For the MSMEs, a 1% higher incentive is proposed in year 1, year 2 and year 3.

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

The minimum investment threshold for MSMEs has been kept at Rs 10 crore and for others at Rs 100 crore.

Telecom equipment that would get covered under the scheme include core transmission equipment, 4G/5G next-generation radio access network and wireless equipment, access and customer premises equipment (CPE), Internet of things (IoT) access devices, other wireless equipment and enterprise equipment like switches, routers, etc.

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