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Telecom and networking equipment PLI norms finalised for cabinet approval

The government has finalised the norms for Production Linked Incentive (PLI) scheme for the telecom and networking equipment for the cabinet’s approval, sources informed CNBC TV-18.

The product categories will be divided into five, sources said. The types of equipment for the PLI scheme will include core transmission equipment, 4G/5G next-generation radio network, wireless equipment, access & customer premises equipment amongst others.

The PLI benefits include 7 percent for MSME companies per year on eligible incremental sales for the 5 years period. Similarly, Non-MSME companies will be eligible for a 6 percent incentive in the first and second year, 5 percent in the third and fourth year, and 4 percent in the fifth year.

The annual incremental sales will be calculated over the base year of FY20. The amount of the incentive will be capped and the scheme will be implemented through a project management agency.

The PLI conditions will include criteria of a minimum threshold of cumulative incremental investment over the 4 years period. To reap the benefits under the PLI scheme, an entity will have to invest 20 percent of the promised investment, 40 percent in the second year, 70 percent in the third year, and 100 percent by the fourth year.

The companies interested to avail of the benefits of the PLI scheme will also be eligible to invest in single or multiple eligible products to meet the minimum criteria for sales and investment. The scheme will also include contract manufacturers as defined by the Foreign Direct Investment Policy.

The government also plans to constitute an empowered panel to review rates, ceilings, target segments, and eligibility criteria. The telecom and networking equipment PLI will have no overlap with the Ministry of electronics and information technology.

The scheme is expected to be notified within 2 weeks of cabinet approval and the government may invite applications within 4 weeks of notification of the scheme. The aim is to implement PLI schemes starting in April 2021 and the allocation for the telecom and networking equipment PLI is Rs 12,195 crore. Cnbctv18

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