Cabinet Approves PLI Scheme for Telecom Equipment Makers

In a recent development sure to cheer up telecom equipment makers all across the country, the central government on Wednesday approved a PLI scheme for them. This extends the total PLI schemes in the country to 10 and is worth Rs. 12,200 Crores.  It is said to bring more employment and production power to the telecom gear makers all over the country.

The Importance to Telecom Equipment Manufacturers

In a press conference after the cabinet meeting on Wednesday, the Electronics and IT Union Minister Ravi Shankar Prasad said that the move will create a conducive environment for ease of doing business. He also noted that the PLI scheme will position India as a hub for manufacturing telecom equipment for the world.

In November, the Union Government had reserved Rs. 1.46 Lakh Crores for PLI schemes for 10 major industries. The PLI scheme for telecom infra makers has earmarked 12,195 Crores for the telecom industry and is an extension of a similar scheme for mobiles and consumer electronics. The latter scheme's huge success has prompted this move.

The implementation of the PLI scheme will start from 1st April 2020. The Union Minister noted that while the PLI scheme is primarily aimed to cut import dependence, this is also meant to encourage domestic telecom infra makers as well. The scheme will generate more than 40,000 direct and jobs in telecom equipment manufacturing within the country.

The PLI scheme will also generate around Rs. 2.46 Lakh Crores worth of production within the country. The Union Minister also chalked out the plan for incentives.

• The minimum investment threshold needs to be at least Rs. 100 Crores for large industries and Rs. 10 Crores for MSMEs
• The Incentive will be 1% higher for MSMEs to promote healthy competition.
• The incentive can reach up to 20 times the amount of investment at the start to realize their full potential.

Response from the Telecom Equipment Makers

The telecom infra makers have welcomed the move.

“We congratulate the government on the recently approved PLI for telecom equipment manufacturing. Initiatives like these will help India position itself as a manufacturing hub of the world. This will open up many opportunities to manufacturers. India will see companies moving their supply chains here, and truly become atmanirbhar. At the same time, it is also important to take steps towards moving component manufacturing to India,” said George Paul, chief executive officer of industry body Manufacturers’ Association for Information Technology.

This move is part of the plan to expand the PLI scheme to further boost production in crucial sectors.