Govt Approves PLI Scheme For Telecom Sector

As part of the central government's initiatives under Atmanirbhar Bharat, the Cabinet on Wednesday approved the Production Linked Incentive (PLI) Scheme for Telecom and Networking Products.

"This approval comes in wake of very encouraging success of PLI related to Mobile and component manufacturing, which was announced in April 2020 during the height of Covid pandemic. In spite of 31st July 2020 being the last date for applying, it received a resounding response. All major mobile component manufacturers of world are expanding their powerful footprints in India by making investments, starting exports and giving jobs to thousands of Indians," said the Ministry of Communications in a statement.

The statement further said that the initiative is to make India a global hub of manufacturing telecom equipment including core transmission equipment, 4G/5G Next Generation Radio Access Network and Wireless Equipment, Access & Customer Premises Equipment (CPE), Internet of Things (IoT) Access Devices, Other Wireless Equipment and Enterprise equipment like Switches, Routers etc.

The core component of this scheme is to offset the huge import of telecom equipment worth more than Rs 50,000 crores and reinforce it with "Made in India" products both for domestic markets and exports.

The scheme outlay is Rs 12,195 crores over five years.

The eligibility for the scheme will be subject to achievement of a minimum threshold of cumulative incremental investment and incremental sales of manufactured goods net of taxes.

Financial Year 2019-20 shall be treated as the Base Year for computation of cumulative incremental sales of manufactured goods net of taxes.

MSMEs, 1% higher incentive is proposed in the first three years.

Minimum Investment threshold for MSME has been kept at Rs 10 crore and for others at Rs 100 crore. Once qualified, the investor will be incentivized up to 20 times of minimum investment threshold enabling them to utilize their unused capacity. The scheme will be operational from 1 April 2021.