PLI Scheme for Telecom: DoT to Look At Companies’ Investment, Production from April 1

According to a report by Financial Express, the DoT will take into account the incremental investment and production starting April 1 for the companies which would be selected under the PLI Scheme for telecom equipment manufacturing.

PLI Scheme to Apply from April 1 Onwards

“We are trying to issue the guidelines this week. But for companies, it should not be a concern as they can plan their investment and production for the PLI scheme and selected companies will get the benefit effective April 1,” as per DoT sources.

The telecom department basically presented a clarification after several companies raised their concerns regarding the same. The companies said that two months have passed without any selections. They argued that this will give them less time to meet the targets for incentives. However, the sources noted that key officials engaged with the PLI scheme were down with COVID-19 alongside their families. This situation has caused delays in the department issuing guidelines and selecting companies. These situations have only compounded the short handedness.

Global equipment makers such as Cisco, Nokia, Ericsson, as well as contract manufacturers Flex, Dixon Technologies, and Foxconn have expressed their interest in applying. The scheme came into effect on April 1, 2021. However, none of them can apply before the DoT issues guidelines.

For the same, Dixon recently partnered with Bharti Airtel to form a joint venture to manufacture telecom infra. The JV will manufacture products like modems, routers, Internet of Things (IoT) devices for the telecom sector.

What is the PLI Scheme?

The PLI scheme is worth Rs 12,195 crore and will offer incentives between 4-7% for different equipment categories and years. It will consider FY 2019-20 as the base year for calculating the total incremental sales. Additionally, the scheme will look a variety of products and equipments. These include core transmission equipment, 4G/5G RAN and wireless equipment, access and customer premises equipment (CPE), Internet of things (IoT) devices, other wireless equipment and enterprise equipment like switches, routers, and so on.

As per multiple reports and the draft guidelines for the scheme, more investment will translate into a better chance at qualifying for the scheme. The minimum investment amount for MSMEs is Rs 10 crore and for others it is Rs 100 crore.