PLI: DoT sets norms for Rs 12,195-cr telecom gear manufacturing scheme

The Department of Telecommunications (DoT) on Thursday issued operational guidelines for the Rs 12,195-crore PLI scheme for the telecom sector.

The registration process for the scheme will begin on Friday and remain open for 30 days till July 3, DoT said in a statement.

The scheme, which will be effective from April 1, 2021, will provide incentives to eligible companies on their investments and incremental sale, from the ongoing financial year till 2025-26.

"...after extensive consultations with stakeholders, the operational guidelines for the scheme have been issued on June 3, 2021.

"The scheme envisages to create global champions out of India who have the potential to grow in size and scale using cutting-edge technology and thereby penetrate the global value chains," DoT stated.

Telecom gear makers such as Ericsson, Nokia and HFCL are keen to expand their operations in India. Global companies including Samsung, Cisco, Ciena and Foxconn have also "shown interest" in setting up manufacturing bases in the country for telecom and networking products for the domestic market and exports.

The scheme for telecom gear manufacturing in India is expected to encourage production of equipment worth Rs 2.44 lakh crore over a period of five years.

According to an earlier announcement made by the government, investments under telecom PLI (production-linked incentive) are expected to create direct and indirect employment for about 40,000 people.

Investors can earn 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.

"The scheme will be effective from April 1, 2021. Investment made by successful applicants in India from April 1, 2021, onwards and up to the financial year 2024-25 shall be eligible, subject to qualifying incremental annual thresholds.

"The support under the scheme shall be provided for a period of five years, i.e. from FY 2021-22 to FY 2025-26," according to the statement.

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

"The scheme is open to both MSME and non-MSME companies, including domestic and global companies. Also, manufacturers with products with Indian technology are encouraged to apply.

"Interested eligible applicants can start the registration process for the scheme from June 4. 2021... The application window shall be open for 30 days i.e. up to July 3 2021," the statement said.

The government has set a minimum investment threshold of Rs 10 crore for MSMEs and Rs 100 crore for non-MSME applicants.

Land and building costs will not be counted as investment.

"Eligibility shall be further subject to incremental sales of manufactured goods (covered under scheme target segments) over the base year (FY 2019-20)," the statement said.

Small Industries Development Bank of India (SIDBI) has been appointed as the project management agency for the PLI scheme.