Telecom equipment
manufacturing and exports are becoming a new success story following the success of smartphone exports. In the financial year 2024, the telecom equipment production exceeded the milestone of Rs 45,000 crore with exports totaling approximately Rs 10,500 crore, supported by the
production linked incentive
(PLI) scheme of the Centre.
According to government data shared with ET, the scheme has resulted in the creation of more than 19,500 direct jobs. “Telecom equipment manufacturing was a dream for our country and the
Make-in-India
and PLI programme have really succeeded,” telecom minister Ashwini Vaishnaw told the financial daily.
Vaishnaw said that India has been importing
telecom gear
for many years, but this changed due to the Make-in-India and
PLI scheme
, leading to the production of equipment valued at over Rs 45,000 crore in the country.
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Telecom equipment includes intricate items like radios, routers, and network equipment, among others. Furthermore, companies are permitted by the government to avail benefits for producing
5G fixed wireless access
(FWA) equipment. Major telecom companies like
Reliance Jio
and Bharti Airtel are heavily investing in FWA to capitalize on 5G, and all the products are manufactured domestically.
According to government data, global firms contributed Rs 36,537.68 crore out of the total sales of Rs 45,988.54 crore until February, while domestic firms accounted for Rs 6,768.74 crore and MSMEs for Rs 2682.12 crore. Regarding employment, domestic companies generated 14,525 jobs, with MSMEs creating 2984 jobs and global firms contributing 2041 jobs.
Telecom equipment manufactured in India is currently being exported to North America and Europe, with top telecom companies worldwide as customers. “Lots of our Indian manufacturers are getting design inputs into the products. Products are designed in India, made in India and then exported, and the quality of products is good,” the minister said.
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The Department of Telecommunications (DoT) notified the Production Linked Incentive (PLI) scheme for telecom and networking products in February 2021 with a budget of Rs 12,195 crore spread over a period of five years.
In total, 31 companies received approval on October 14, 2021, for the scheme, which provides incentives ranging from 4% to 7% for various categories and years. Micro, Small, and Medium Enterprises (MSMEs) are proposed to receive a 1% higher incentive in the first, second, and third years.
The scheme was changed in April 2022 to support manufacturing based on design with an extra incentive rate of 1%, allocating Rs 4,000 crore from the total fund. The scheme was prolonged by one year because many chosen companies could not meet production goals due to disruptions in the supply chain caused by Covid.
A total of 42 companies, which included 28 MSMEs, were chosen as part of the updated program. These companies pledged to invest a total of Rs 4,115 crore and were projected to generate extra sales amounting to Rs 2.45 lakh crore, along with creating over 44,000 additional jobs during the scheme’s duration.
Some of the well-known companies participating in the telecom PLI scheme are Samsung, Dixon Technologies, HFCL, Jabil, Flextronics, Sanmina, Rising Star, Nokia, Tejas, and others. Nokia and Ericsson have used mostly radios made in India to deploy 5G networks for Reliance Jio and Bharti Airtel.
In the financial year 2023, more than 20 companies achieved the targets, such as Nokia, Jabil, Sanmina, HFCL, VVDN, Coral, and Tejas Networks. Nevertheless, in the financial year 2024, the number of companies meeting the targets is expected to increase, according to officials.
The Centre had tightened rules around custom duty payments by gear importers to plug leakages in order to boost equipment manufacturing. Experts said that this helped in the local manufacturing of routers, modems, and set top boxes among others.
