Telecom PLI scheme extended
Source: By Soumyarendra Barik: The Indian Express
The Department of Telecommunications (DoT) has extended the production-linked incentive (PLI) scheme for telecom by one year, and has amended the scheme to raise the incentive rate by an additional 1 per cent, aimed towards incentivising design-led manufacturing in the sector.
The amendment comes days after the country took its first step towards 5G rollout as the Union Cabinet cleared a proposal to invite applications for spectrum auctions. “With the objective to build a strong ecosystem for 5G, the Union Budget 2022-23 has proposed to launch a scheme for design-led manufacturing as part of the existing PLI scheme. After consultations with stakeholders, the guidelines for the PLI Scheme for Telecom & Networking Products have been amended to introduce design-led manufacturing with additional incentive rates,” said an official release.
What are the incentives under the amended telecom PLI?
The design-led manufacturing scheme is open for both medium and small-scale enterprises (MSMEs) and non-MSMEs, including domestic and global companies. The DoT also said applications for design-led manufacturing will be prioritised over other manufacturers. The scheme requires an investment threshold of Rs 10 crore for MSMEs and Rs 100 crore for non-MSMEs, excluding land and building cost.
The Centre will provide additional incentives of over Rs 4,000 crore under the amended scheme. The incentives will be based on incremental sales of the manufactured goods, and range between 4 per cent to 7 per cent for different categories over the years. MSMEs will get an additional 1 per cent incentive in the first, second, and third years. The DoT has also approved 11 new telecom and network products to the existing list of products that can be manufactured under the scheme.
“For promoting design-led manufacturing, DoT is inviting applications from Design-led manufacturers as well as others, for availing incentive under the PLI Scheme for five years commencing from 1st April 2022. Investment made by successful applicants in India from 1st April 2022 onwards and up to Financial Year 2025-2026 shall be eligible, subject to qualifying incremental annual thresholds,” the Ministry of Communications said in a statement.
How has the telecom PLI fared so far?
The DoT notified the PLI scheme for telecom and networking products on 24 February 2021, with a financial outlay of Rs 12,195 crore, over five years. In October, it approved 31 proposals entailing an investment of Rs 3,345 crore over the next four and a half years. The shortlisted entities included the likes of Nokia India, HFCL, Dixon Technologies, Flextronics, Foxconn, Coral Telecom, VVDN Technologies, Akashastha Technologies, and GS India.
According to the government’s dashboard, so far, Rs 451 crore has been invested in the scheme, led primarily by global companies who account for more than Rs 240 crore of the total investment. Additionally, the scheme has generated over 5,000 employment opportunities and sales worth more than Rs 9,000 crore have taken place under the scheme.
