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Incentive scheme for telecom to boost manufacturing amid 5G build-up

The telecom industry on Wednesday cheered the introduction of the PLI scheme for communications and networking products, saying it would boost manufacturing, attract component sector and industries, and support local demand for equipments at a crucial time when India is gearing up for 5G.

The government has approved a production-linked incentive (PLI) scheme for 10 key sectors, including telecom, automobiles and pharmaceuticals, taking the total outlay for such incentives to nearly ₹2 lakh crore over a five-year period.

Of this, the outlay for telecom and networking products is pegged at ₹12,195 crore, an official release said noting that India’s aspirations to become a major manufacturing hub for these telecom equipments, which form a critical and strategic element of secured infrastructure.

“Telecom equipment forms a critical and strategic element of building a secured telecom infrastructure and India aspires to become a major original equipment manufacturer of telecom and networking products,” the release said.

The incentives are expected to attract large investments from global players and help domestic companies grab emerging opportunities and become big players in the export market.

The product lines that have been specified include core transmission equipment; 4G/5G, next-generation radio access network and wireless equipment; and access and customer premises equipment (CPE).

They also include internet of things (IoT) access devices and other wireless equipment; and enterprise equipment including switches and router.

Industry body COAI said the move reflected the government’s commitment to Make in India and to foster inclusive growth in the industry by making it faster, easier and more competitive to conduct business.

The Indian telecom industry has been “extremely resilient” during the ongoing pandemic and has played a pivotal role in supporting other sectors, especially during the COVID-19 lockdown, said Cellular Operators’ Association of India (COAI) Director General S P Kochhar.

While the industry is awaiting details of the incentive scheme, the sector is fully confident that the scheme would be designed to ensure demand for telecom equipment from the local market is enhanced and exports from India are suitably supported and incentivised.

Ericsson India Managing Director Nitin Bansal said the scheme comes as a “very opportune time” as India is on the verge of introducing 5G in the country.

“Being the first telecom vendor to start manufacturing in India, we hope that the PLI scheme will not only give a strong boost to the manufacturing industry in India but also attract the component sector and industries for leveraging networks for enterprise, IoT and Industry 4.0,” Bansal said.

Ericsson India began investment to set up production facility in India in 1994, he added.

TEMA Chairman Emeritus N K Goyal said the PLI announcement would encourage domestic production and exports, and entail significant employment opportunities.

“We expect increase in domestic production to be in the tune of ₹2 lakh crore in five years with employment generation of one lakh, both direct and indirect,” Goyal said. PTI

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