India has witnessed a remarkable revolution in the telecom and IT sectors over the past few decades. The bright Indian entrepreneurs, advent of new technologies, and support of the government initiatives have transformed India into a global powerhouse in telecommunications and digital economy. This article explores the government initiatives supporting the sector, significant contributions of the industry to the Indian economy and exports, manufacturing of telecom equipment, the rollout of 5G technology, and the emerging challenges.
India is now rapidly emerging as a global leader in the Internet economy, duly supported by the government initiatives, contributing significantly to the economic growth and exports. According to a joint report by Google-Temasek-Bain, released recently, India’s Internet economy is expected to register a six-fold surge during the decade, reaching USD 1 trilion by 2030.
India has emerged as a prominent hub for telecom equipment manufacturing, attracting both domestic and international players. The government’s Make in India initiative has played a pivotal role in encouraging local manufacturing, reducing dependency on imports, and boosting jobs. Several leading companies like Nokia, Ericsson, Samsung, and Apple have established manufacturing facilities in the country, for the production of a wide range of telecom equipment.
The government had last year extended the PLI scheme for telecom and networking products to 42 beneficiaries, with a total committed outlay of ₹4115 crore. Out of these, 17 companies had applied for additional incentive of 1 percent, as per the stipulated criteria under design-led manufacturing, aimed to build a strong eco-system for 5G. To boost it further, the government has just announced a modified version PLI Scheme 2.0 for IT hardware – covering laptops, tablets, all-in-one PCs, servers, and ultra-small form factor devices – with a budgeted investment of ₹17,000 crore. It is expected to generate 17,000 direct and 2 lakh indirect jobs, and a likely production of USD 24 billion by 2025-26 and exports of USD 12–17 billion.
The rollout of 5G technology in India is poised to be a game changer for the telecom industry. 5G promises higher data speeds, lower latency, and enhanced connectivity, opening up possibilities for innovative applications across sectors, such as healthcare, education, transportation, and manufacturing. The government has actively pushed the adoption of 5G technology, manufacturing of equipment, and spectrum auctions to enable its commercial deployment. The rollout of 5G is expected to accelerate digital transformation, fuel innovation, and provide a boost to the overall economy.
The Prime Minister launched the 5G services in October 2022, and within 8 months, these services rolled out in all 28 states and 8 UTs, making it the fastest 5G rollout in the world. During this period, 200,000 sites covering 700 districts have been covered with 5G mobile spread having fiber connectivity, even to the hilly and remote areas. Such fiber connectivity supports extremely high Internet bandwidth for seamless access at various locations providing much superior voice and video call quality.
The government has introduced several initiatives to promote the growth of the telecom and IT sectors. The Digital India campaign aims to transform India into a digitally empowered nation and knowledge economy. It focuses on improving digital infrastructure, expanding broadband connectivity, and increasing digital literacy. The National Digital Communications Policy 2018 aimed to attract investments, promote ease of doing business, and ensure universal broadband access. These initiatives have created an enabling environment for telecom and IT companies, fostering innovation, entrepreneurship, and job opportunities.
The telecom and IT sectors have emerged as key contributors to the Indian economy. The rapid expansion of mobile and Internet penetration has connected millions of people, bridging the digital divide and enabling access to various services. Telecom and IT companies have been significant contributors to the country’s GDP, employment generation, and tax revenues. The sector has stimulated economic growth, attracting investments, and fostering technological advancements. Additionally, the increased adoption of digital services has facilitated financial inclusion, e-commerce growth, and digital payments, further driving the economy forward. During the pandemic, digital economy received a big boost, with e-commerce in goods and services carrying the daily life and businesses on its shoulders, be it trade, education, healthcare, or delivery of government services, etc.
India’s telecom and IT industry has gained global recognition for its capabilities and competitiveness. The country has become a leading exporter of IT and IT-enabled services, offering a wide range of services, including software development, business process outsourcing, and engineering services. Indian companies have established their presence in international markets, providing cutting-edge solutions and generating export revenues. Moreover, Indian telecom equipment manufacturers have also been exporting their products to various countries, contributing to the country’s export earnings. The government’s recent schemes under PLI 2.0 are expected to contribute significantly in this regard.
Competition is good for the growth, quality, and service in the sector. The government envisions state-owned BSNL to be in the league of the few major players, providing better competition and resultant benefits to people, and has announced the third revival package for BSNL with a total outlay of ₹89,047 crore, extending the total financial support to BSNL to ₹3.22 lakh crore. The package includes allotment of 4G and 5G spectrum for BSNL with equity infusion.
The telecom and IT revolution in India has propelled the country into the digital age big time, with significant contributions to economy and exports. Government initiatives such as Make in India and Digital India have fostered a conducive environment for growth, attracting investments and creating job opportunities. The rollout of 5G technology, along with frontier technologies like AI, ChatGPT, etc., hold tremendous potential for innovation and economic development. It is essential to sustain the momentum through policy support and collaboration between industry players, academia, and the government.