Union Cabinet approves ₹12,000 cr PLI scheme for telecom equipment

The Union Cabinet on Wednesday approved Production Linked Incentive (PLI) norms for the telecom and network equipment manufacturing in order to boost local manufacturing of the components, said Union Minister of Electronics and Information Technology Ravi Shankar Prasad.

The PLI scheme for the telecom sector is worth ₹12,195 crore over 5 years. The scheme will be implemented from April 1, said Prasad while addressing a press conference on Cabinet decisions today.

Shares of telecom equipment makers like Dixon Technologies, D-Link India, ITI, Sterling Technologies, Tejas Network and Shyam Telecom surged on Wednesday after this announcement.

"Under the PLI scheme, Telecom manufacturing to get boost with an outlay of ₹ 12,195 crores over 5 years leading to enhanced production of more than ₹2.4 lakh crore with exports of around ₹2 Lakh crore," he said.

The scheme will cover core transmission equipment, 4G/5G and next-generation radio access network and wireless equipment, access and customer premise equipment (CPE), Internet of Things (IoT) access devices, and enterprise equipment such as switches and router.

It is also expected that scheme will bring investment of more than ₹3,000 crore and generate huge direct and indirect employment and taxes both.

The eligibility for the scheme will be subject to achievement of a minimum threshold of cumulative incremental investment and incremental sales of manufactured goods net of taxes.

There will be a minimum investment threshold of ₹10 crore for MSME with incentives from 7% to 4 % and ₹100 crore for others with incentives from 6% to 4 % over 5 year above Base Year. The applicants with higher investments than specified threshold under MSME and Non-MSME categories will be selected through transparent process.

Once qualified, the investor will be incentivized up to 20 times of minimum investment threshold enabling them to utilize their unused capacity.

The core component of this scheme is to offset the huge import of telecom equipment worth more than ₹50,000 crores and reinforce it with 'Made in India' products both for domestic markets and exports, the government said in a statement.


Source: livemint.com, economictimes.com

Written by Siddhant Sharma