DoT pushes local manufacturing with new procurement clause for 5G gear

As Indian companies enhance the capacity to manufacture 5G technology products at scale, they will be prioritised for 'Make in India' procurement orders, ensuring these goods are sourced domestically

The Department of Telecommunications (DoT) has updated its public procurement policy to prioritise domestic companies that can produce 5G technology products at scale. The measure aims to promote manufacturing of indigenous 5G technology in India by giving local firms a competitive advantage over international players in public sector contracts, according to a report by The Economic Times.

 

Telecom Secretary Neeraj Mittal reportedly said the new policy underscores India’s goal of becoming a leading telecom technology provider. As Indian companies build the capacity to manufacture these products at scale, they will gain preference in Make in India (MII) procurement orders, ensuring these goods are sourced domestically, he said.

 

In its draft public procurement guidelines prioritising Make in India, DoT had listed 36 products requiring over 50 per cent local content for government procurement eligibility. However, 5G technology products were initially omitted, raising concerns among domestic companies. The final guidelines now include this provision for 5G products, acknowledging that these technologies are currently being tested within India.

 

Adding potential 5G items going ahead

 

According to the DoT notification, the product list, known as Table-A, will undergo periodic reviews to potentially add 5G items and virtual routers based on manufacturing capacity. Domestic manufacturers are encouraged to provide evidence of their production capacity to support the inclusion of additional products.

 

The business daily cited industry experts as saying that over 10 local companies, including Tejas, Lekha Wireless, VVDN, and Galore, are working on 5G products, some of which are conducting trials using BSNL spectrum.

 

Presently, the policy mandates that certain telecom items like routers, ethernet switches, media gateways, GPON equipment, optical cables, and telecom batteries must contain at least 50 per cent local content. For specific products, the minimum content threshold is set at 65 per cent. The list will be updated as local firms scale up 5G production.

 

Tightening Make in India rules

 

The government has also tightened Make in India norms by excluding imported goods sourced locally from resellers in the local content calculations. Royalties and technical charges paid outside India, as well as repackaged or refurbished items, are also excluded from local content calculations under a recent Department of Promotion of Industry and Internal Trade order.

 

For public procurement, DoT has outlined that priority goes to ‘Class-I’ suppliers with a minimum of 50 per cent local content. If a Class-I supplier is unable to meet demand, a ‘Class-II’ supplier, with at least 20 per cent local content, will be considered. Manufacturers under the production-linked incentive scheme for telecom and networking products are classified as Class-II suppliers for specified items.