The Union Cabinet has approved a Production Linked Incentive (PLI) scheme for telecom and networking products. The financial outlay for the new scheme is Rs 12,195-crore over five years.
The scheme has been approved for products such as 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.
“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,” the Ministry of Communications said in a press release.
“Cabinet decision addresses another component of Atmanirbhar Bharat to make India a global hub of manufacturing telecom equipment,” the telecom ministry added.
The core component of this scheme is to offset the import of telecom equipment worth more than Rs. 50 thousand crores and reinforce it with “Made in India” products both for domestic markets and exports.
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. The Financial Year 2019-20 shall be treated as the Base Year for computation of cumulative incremental sales of manufactured goods net of taxes.
For MSMEs, one percent (1%) higher incentive is proposed in year 1, year 2 and year 3. Minimum Investment threshold for MSME has been kept at Rs. 10 Crores and for others at Rs. 100 Crores.
The Scheme will be operational from 1st April 2021 and also addresses local manufacturing in MSME category because Government desires MSMEs to play an important role in the telecom sector.
The government said that this scheme will lead to incremental production of around ₹2.4 Lakh Crores with exports of around ₹2 Lakh Crores over 5 years. It is also expected that scheme will bring investment of more than ₹3,000 crore and generate huge direct and indirect employment and taxes both.
Prior to this, the Government has approved PLI scheme of Rs 1.46 Lakh crore for ten key sectors for a five-year period to boost manufacturing. With this scheme, the government plans to encourage domestic manufacturing, reduce imports and create employment.
