Government approves 42 companies for telecom products under PLI scheme; details here

The Ministry of Communication has granted approval to 42 companies including Nokia, Samsung, Flextronics, Ericsson’s partner Jabil, Tejas Networks, HFCL, and VVDN, under the production linked incentive (PLI) scheme for telecom and networking products. The corporations have committed investments worth Rs 4,115 crore, according to a report in Mint. Out of the total approved companies, 17 have applied for additional incentive of 1 percent under design-led manufacturing criteria. The Union Budget had announced a design-led PLI scheme for networking and telecom products to create a robust domestic value chain. The scheme provided an additional incentive of 1 percent over and above on the existing incentives for products designed and manufactured in India.

The design-led PLI scheme was introduced in June 2022 and applications were invited from design-led manufacturers along with others, for availing incentive under the PLI Scheme for 5 years, starting from 1 April, 2022.

According to the Ministry of Communication, the investment is likely to generate additional sales of Rs 2.45 trillion and create over 44,000 jobs in the scheme period. The ministry further added that India is poised to emerge as a hub of design and manufacturing for telecom and networking equipment.

The existing firms under the PLI scheme for telecom and networking products were allowed to add more products and apply under the design-led PLI scheme. They were also provided the benefit of shifting their 5-year PLI scheme duration by one year. The ministry stated that 22 companies have availed this opportunity of shifting their first year which includes 13 companies who have applied as fresh applicants.

The Department of Telecommunications (DoT) had announced the PLI scheme for telecom and networking products in February 2021 with an outlay of Rs 12,195 crore. A total of 31 companies were given approval on 14 October, 2021 for the scheme. As per the DoT, the enthusiastic response from domestic and global companies to manufacture telecom equipment in the country imply strong confidence in initiatives of the government.

The minimum investment threshold stipulated by the scheme is Rs 10 crore for MSMEs and Rs 100 crore for non-MSME applicants. Land and building costs are not going to be counted as investment.