The government revamps the PLI scheme for the telecom sector, boosting exports and incorporating more MSMEs, with increased allocation from Rs 1,000 crore to Rs 2,500 crore.
The government is planning a significant revamp of the production-linked incentive (PLI) scheme aimed at the telecom sector. The primary objectives include boosting exports and integrating more micro and small units into the manufacturing ecosystem.
The allocation for MSMEs was recently bolstered from Rs 1,000 crore to Rs 2,500 crore to achieve these goals. The scheme focuses on fostering domestic manufacturing of telecom and networking products. Expanding the scheme is urgently needed, mainly to capitalise on global demand for telecom gear during widespread 5G rollouts in critical markets.
In line with this strategy, India aims to export a comprehensive range of domestically designed 4G and 5G technologies by 2024, aligning with its broader agenda to attract investments and enhance technological diplomacy.
The Department of Telecommunications (DoT) holds surplus funds exceeding Rs 1,000 crore, emphasising readiness to support these ambitious initiatives.
As of FY23, nearly half of the 42 companies benefiting from the PLI scheme in the telecom sector have failed to meet their targets, resulting in a surplus fund of over Rs 1,500 crore within the department. Despite the release of funds for FY24, officials indicate a remaining surplus of more than Rs 1,000 crore earmarked for this purpose.
Initially projected to boost additional sales by Rs 2.45 trillion and create over 44,000 jobs, the scheme had, by October-end last year, attracted investments totalling Rs 2,725 crore from companies out of a committed Rs 4,014 crore. Moreover, exports worth Rs 8,804 crore had been achieved, creating 15,500 jobs.
Companies initially raised concerns about rigorous incremental and production targets for the first operational year (2021-22). Applicants must meet minimum global revenue criteria to qualify, with the flexibility to invest in single or multiple eligible products.
The scheme mandates a minimum investment threshold of Rs 10 crore for MSMEs and Rs 100 crore for non-MSME applicants, excluding land and building costs. Eligibility also hinges on higher sales of manufactured goods compared to the base year (FY20).
