Nokia, HFCL among 25 companies register under PLI scheme for telecom sector

Around 25 telecom gear makers -- including Nokia and HFCL -- have applied under the Rs 12,195 crore production linked incentive scheme for the sector, according to official sources.

Indigenous companies Tejas Networks and Dixon Technologies have confirmed that they will apply for the scheme before the deadline ends on July 3.

"25 companies have registered for the PLI scheme till date. We have received interest from big companies as well. They are expected to apply before the deadline ends," an official source told PTI.

Under the scheme, an investor can get the incentive for incremental sales up to 20 times the committed investment, enabling them to reach global scales and utilise their unused capacity and ramp up production.

HFCL Managing Director Mahendra Nahata and Coral Telecom confirmed that they have applied for the scheme.

Another official source said that Nokia has also registered for the scheme.

Coral Telecom managing director Rajesh Tuli said there are no choice for any micro, small and medium enterprises because they will become non-competitive by 7 per cent if they don't participate in the scheme and die.

He said the telecom sector PLI is an excellent scheme, but large weightage should be given to 'the domestic value addition to the selection criteria.

"Otherwise, you may get 10 big investors or even traders bidding in MSME category each committing to invest Rs 50 crore who would do soldering and assembly which is about 7 per cent of the manufacturing cost.

This 7 per cent would be reimbursed by the government. One has to be careful and safeguard against such situations where we may only create traders who upscale themselves by one step," Tuli said.

Tejas Networks chief executive officer and managing director Sanjay Nayak and Dixon Technologies executive chairman Sunil Vachani said they will be applying for the scheme.

State-owned telecom gear maker ITI Limited is also in the process of submitting applications.

The scheme will be effective from April 1, 2021.

Investments made by successful applicants in India from April 1, 2021, onwards and up to the financial year 2024-25 will be eligible for incentives, subject to qualifying incremental annual thresholds.

The support under the scheme will be provided for a period of five years from FY22 to FY26.

The scheme is expected to bring an investment of over Rs 3,000 crore and generate tax revenue of about Rs 17,000 crore.

The government expects that the scheme will encourage the production of equipment worth Rs 2.44 lakh crore, with exports of around Rs 2 lakh crore over a period of five years.