Government’s plan to incentivise production of telecom equipment and networking hardware will help establish the local manufacturing ecosystem of these products, encourage research and development, attract large investments and boost small enterprises, industry executives said.
The Cellular Operators Association of India (COAI), which represents service providers and gear vendors, said that the production-linked incentive (PLI) scheme will boost local manufacturing, exports and also create employment opportunities.
“India is already the second largest telecom market globally and this will go a long way in making the country a global hub for telecom innovation,” said SP Kochhar, director general, COAI.
Finnish gear maker Nokia through its India handle said the guidelines were an encouraging initiative by the government towards making India a global manufacturing hub. “Nokia is committed to this vision with our Chennai factory that manufactures telecom equipment from 2G to 5G-making for India and the world.”
The Telecom Equipment Manufacturers’ Association (TEMA) which represents domestic telecom companies lauded the separate financial outlay of Rs 1000 crore earmarked for MSMEs.
“TEMA is particularly happy that threshold limits for investment has been made quite reasonable at Rs 10 crores for MSME and Rs 100 crores for non MSMEs. DoT is complemented on a very out of box initiative to reserve three applicants in each category only for domestic companies,” said NK Goyal, chairman, TEMA.
Sunil Vachani, executive chairman, Dixon Technologies said, “We have formulated a plan to invest in manufacturing consumer premise equipment, switches and routers. Dixon has also announced a joint venture with Bharti Enterprises to manufacture telecom gear in India.”
“With the already reduced income-tax rate for domestic manufacturing companies, the announcement of the PLI scheme will make India a lot more manufacturing friendly destination,” said Ritesh Kumar, Partner, IndusLaw.
Kunal Chaudhary, Partner, EY India said, “With a qualification criterion of global manufacturing turnover of INR 250 crores and INR 10,000 crores for Domestic and Global Companies respectively, 15% weightage to R&D expense and incentive to be given only to a maximum of 10 non MSME companies, it would be interesting to see how the industry works to meet these criteria.”
