TheNFAPost Podcast

Bengaluru, NFAPost: The Production Linked Incentive (PLI) scheme, a new incentive linked policy initiative by the Modi-led government, is conceived to create champions in large sectors and with a sizable budget allocation of Rs 1.97 lakh crore in the Union Budget 2021-22.

Besides electronics, Pharma, the PLI scheme covered 13 sunrise sectors comprising Telecom, IT hardware, Batteries, Auto etc. Of the 13 sectors, the government strongly focused on the Telecom sector due to the recent security concerns and excessive import dependence. Keeping this in mind, the PLI scheme for telecom & networking products was notified on 24 February 2021 with a huge budgetary outlay of Rs 12,195 crore.

The incentive under the scheme will be provided to eligible applicants for a period of five years effective from 1 April 2021 with a condition of minimum incremental investment and incremental sales. The scheme also provides a special focus on the MSME/Startup sector with a 1% additional incentive for the first three years.

The eligible products under the scheme are core transmission equipment, 4G/5G, next-gen RAN and wireless equipment, access and customer premises equipment, IoT access devices, and other wireless equipment and enterprise equipment like switches, routers, etc.

Incentives shall be calculated on incremental sales of manufactured goods over the base year, i.e., 2019-20. Incentives will be granted once all the scheme conditions are met by the applicant and the maximum incentive per applicant may exceed three times the total committed investment.

With such huge incentives, both global and domestic manufacturers are planning to enhance their manufacturing capacities and cater to domestic and international demand.

India is the second-largest telecommunication market and with telecom services providers moving towards 5G technology and new-age connected equipment, domestic manufacturing will play a pivotal role to set up the digital infrastructure in the country. The scheme proposes to offset large import of telecom equipment worth more than Rs 50,000 crore and reinforce it with made-in-India products.

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