New Delhi: The telecom department has launched an incentive scheme for design-led manufacturers at a cost of Rs. The 12,195-crore Production-Linked Incentive (PLI) scheme has been extended for one year, an official statement said on Monday.
The incentive for design-based manufacturing is part of the PLI scheme that was notified on February 24, 2021. The DoT has amended the clause and made the scheme effective from April 1, 2022.
“With the aim of building a stronger ecosystem for 5G, the Union Budget 2022-23 proposes to launch a plan for design-based production as part of the existing PLI scheme.
“After consultation with stakeholders, the guidelines for the PLI scheme for telecom and networking products have been amended to introduce design-led manufacturing with additional incentive rates,” the statement said.
Telecom equipment manufacturers who use 50 per cent of Made in India components in their products will be eligible for the design-linked incentive.
New version of Telecom PLI Focused on the demand of local producers by removing the 15 per cent limit on investment for research and development.
PLI has provision for incentives in the range of 4 to 7 per cent. Design-led manufacturers will receive an additional 1 per cent incentive on existing slabs under the PLI scheme.
The application window will open from June 21 to July 20. The remaining Rs. Incentives will be given out of Rs 4,000 crore.
In addition, based on feedback from stakeholders, including selected PLI applicants, the DoT has decided to extend the existing PLI scheme to one year. Existing PLI beneficiaries will be given the option to choose FY 2021-22 or FY 2022-23.
“The DoT has also approved the addition of 11 new telecom and networking products to the existing list based on stakeholder suggestions,” the statement added.
The Department of Telecom (DoT) announced the PLI scheme on February 24 last year, for which a total of 31 companies, including Nokia, Foxconn, Akashstha Technologies, ITI and HFCL Group, were approved on October 14. By 2025-26, a total of Rs. 3,345 crore.
Companies interested in the incentive scheme must meet the minimum global revenue criteria to be eligible. The company may decide to invest in single or multiple character products.
The scheme has a minimum investment threshold of Rs. 10 crore and for non-MSME applicants Rs. 100 crore.
The cost of land and house will not be treated as an investment under the scheme. Allotment for MSME is Rs. 1,000 crore to Rs. 2,500 crore has been made.
“The changes in the scheme for R&D, the addition of new products like Open RAN (radio access network) and satellite communication equipment and the extension of the scheme to 1 year, clearly indicate that the government will focus on new technologies to further promote India-led R&D. Concentrate and deep and comprehensive production in India, ”said Kunal Chaudhary, Partner, EY India.
The plan for telecom gear manufacturing in India is Rs. 2.44 lakh crore will boost equipment production and create direct and indirect employment for about 40,000 people.
Investors can earn incentives for additional sales up to 20 times the committed investment, enabling them to reach a global level and use their unused potential and increase productivity.
Industry body ICEA chairman Pankaj Mohindra said the DoT’s decisions would not only support Indian entrepreneurs, but also ensure that India strengthens its position in the global value chain (GVC) of the electronics and mobile phone industry.
“The industry could not have expected a better time for this announcement as the global supply chain has been hit by geopolitical tensions following the severe impact of the epidemic.
“Furthermore, the timing of the decisions is important as the country has already taken a big step in telecom with the approval of the auction of 5G spectrum by the Union Cabinet,” Mohindra said.