PLI scheme for Telecom Sector gets Government’s approval

The Government in November 2020 had announced to introduce Production-Linked Incentive (PLI) Scheme in the following 10 key sectors for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat. One of the sectors covered was Telecom and Networking Products among others like automobile, white goods, textile, food processing etc.

Today, the Cabinet has approved the PLI scheme for Telecom and Networking products. The scheme is set to be operational from 01 April 2021.

The scheme is expected to attain incremental production of around INR 2.4 Lakh Crores with exports of around INR 2 Lakh Crores over 5 years.

Brief of the scheme:

  • The primary intent of this scheme is to offset the massive import of telecom equipment and reinforce it with “Made in India” products both for domestic markets and exports.
    • The key features of the scheme are
      • The scheme outlay is INR 12,195 Crores over five years.
      • The scheme would be subject to achievement of a minimum threshold of cumulative incremental investment and incremental sales of manufactured goods net of taxes.
      • Financial Year 2019-20 shall be treated as the Base Year for computation of cumulative incremental sales of manufactured goods net of taxes.
      • Minimum Investment threshold for MSME – INR 10 Crores and for others – INR 100 Crores.
      • The Scheme will be operational from 1st April 2021.
  • The products which are eligible for the scheme are
    • Telecom equipment including core transmission equipment
      • 4G/5G Next Generation Radio Access Network and Wireless Equipment
      • Access & Customer Premises Equipment (CPE)
      • Internet of Things (IoT) Access Devices
      • Other Wireless Equipment and Enterprise equipment like Switches, Routers etc.
  • Incentive structure for the scheme is given below
Category of applicantsYear 1Year 2Year 3Year 4Year 5
MSME7%7%6%5%4%
Others6%6%5%5%4%
*Rates mentioned above are incentive rates, awaiting further guidelines