The Union Cabinet on Wednesday approved Production Linked Incentive (PLI) norms for the telecom and network equipment manufacturing in order to boost local manufacturing of the components, said Union Minister of Electronics and Information Technology Ravi Shankar Prasad. The PLI scheme for the telecom sector is worth ₹12,195 crore over 5 years, he added.
The scheme will be implemented from April 1, said Prasad while addressing a press conference on Cabinet decisions today.
Prasad also said 20,000 jobs are already given by one mobile manufacturer, 1 lakh direct and 3 lakh indirect jobs will be created by a mobile manufacturer next year.
“Under the PLI scheme, Telecom manufacturing to get boost with an outlay of ₹ 12,195 crores over 5 years leading to enhanced production of more than ₹2.4 lakh crore with exports of around ₹2 Lakh crore,” he said while adding that the Centre will soon announce plan to boost local manufacturing of IT products such as laptops and tablet PCs.
The scheme is also expected that scheme will bring investment of more than ₹3,000 crore and generate huge direct and indirect employment and taxes both.
“Today’s Cabinet decision 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,” said Prasad.
The scheme will cover core transmission equipment, 4G/5G and next-generation radio access network and wireless equipment, access and customer premise equipment (CPE), Internet of Things (IoT) access devices, and enterprise equipment such as switches and router.
“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 government said in a statement.
The core component of this scheme is to offset the huge 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, it said.
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.
There will be a minimum investment threshold of ₹10 crore for MSME with incentives from 7% to 4 % and Rs. 100 crore for others with incentives from 6% to 4 % over 5 year above Base Year. The applicants with higher investments than specified threshold under MSME and Non MSME categories will be selected through transparent process.
Once qualified, the investor will be incentivized up to 20 times of minimum investment threshold enabling them to utilize their unused capacity.
This scheme also addresses local manufacturing in MSME category because government desires MSMEs to play an important role in the telecom sector and come out as national champions, the government saif