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DoT raises telecom PLI incentive by 1%

The PLI scheme for promoting telecom and networking products manufacturing has been amended. The Department of Telecommunications(DoT) has extended the scheme by one year and further announces an additional incentive rate of 1% over and above the existing rates.

On Monday, the Ministry of Communications announced that based on feedback from stakeholders including the selected PLI Applicants, DoT has decided to extend the existing PLI Scheme by one year.

That said, the existing PLI beneficiaries will be given an option to choose the financial year 2021-22 or financial year 2022-23 as the first year of incentive.

Also, the telecom department has approved the addition of 11 new telecom and networking products to the existing list, based on suggestions from the stakeholders.

Meanwhile, after consultations with stakeholders, the Guidelines for the PLI Scheme for Telecom & Networking Products have been amended to introduce the Design-led Manufacturing with additional incentive rates.

“PLI Scheme amended to facilitate Design-Led Manufacturing with additional incentive rate of 1% over and above existing incentive rates,” said the ministry statement.

To promote design-led manufacturing, the telecom department is inviting applications from Design-led manufacturers as well as others, for availing incentives under the PLI Scheme for five years commencing from 1st April 2022.

“Investment made by successful applicants in India from 1st April 2022 onwards and up to Financial Year (FY) 2025-2026 shall be eligible, subject to qualifying incremental annual thresholds,” it said.

Notably, both MSME and Non-MSME companies including domestic and global companies are allowed to apply for the scheme.

“The applications from Design-led manufacturers shall be prioritized over other manufacturers while shortlisting,” the ministry said.

However, applicants will have to satisfy the minimum Global Revenue criteria to be eligible under the Scheme. The Centre directs that the company may decide to invest in single or multiple eligible products.

Under the scheme, the minimum investment threshold is ₹10 crore for MSMEs and ₹100 crore for non-MSMEs applicants. Notably, land and building costs will not be counted as investments. Further, the eligibility is subject to incremental sales of manufactured goods over the base year FY2019-20). The allocation for MSMEs has been increased to ₹2,500 crore from ₹1,000 crore.

Applicants can begin the registration process from June 21, 2022, for the scheme. The application window will be available for 30 days and will end on July 20, 2022. These applicants are invited for the balance fund of over ₹4,000 crore.

The ministry said, “This will give a boost to manufacturing of telecom and networking products to develop a 5G ecosystem for India.”

In February last year, the DoT notified the PLI scheme for telecom with a financial outlay of ₹12,195 Crores. A total of 31 companies, comprising 16 MSMEs and 15 Non-MSMEs including 8 Domestic and 7 Global companies were approved on October 14, 2021.

Further, to build a strong ecosystem for 5G, in the Union Budget 2022-23, it was proposed to launch a Scheme for design-led manufacturing as part of the existing PLI Scheme.

CT Bureau

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