DoT extends production-linked incentive scheme for telecom by one year

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The Department of Telecommunications (DoT) has extended the production-linked incentive (PLI) scheme for telecom by one year and has amended the scheme to raise the incentive rate by an additional 1 per cent. The amendment comes days after the country took its first step towards 5G rollout as the Union Cabinet cleared a proposal to invite applications for spectrum auctions.

According to an official release, the design-led manufacturing scheme is open for both medium and small-scale enterprises (MSMEs) and non-MSMEs, including domestic and global companies. The DoT also said applications for design-led manufacturing will be prioritised over other manufacturers. The scheme requires an investment threshold of Rs 10 crores for MSMEs and Rs 100 crores for non-MSMEs, excluding land and building cost.

The incentives will be based on incremental sales of the manufactured goods, and range between 4 per cent to 7 per cent for different categories over the years. MSMEs will get an additional 1 per cent incentive in the first, second, and third years. The DoT has also approved eleven new telecom and network products to the existing list of products that can be manufactured under the scheme.

“For promoting design-led manufacturing, DoT is inviting applications from Design-led manufacturers as well as others, for availing incentive 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 2025-2026 shall be eligible, subject to qualifying incremental annual thresholds,” the Ministry of Communications said in a statement.

The DoT had notified the PLI scheme for telecom and networking products on February 24, 2021, with a financial outlay of Rs 12,195 crore, over the five years. In October, it approved 31 proposals entailing an investment of Rs 3,345 crore over the next four and a half years. The shortlisted entities included the likes of Nokia India, HFCL, Dixon Technologies, Flextronics, Foxconn, Coral Telecom, VVDN Technologies, Akashastha Technologies, and GS India

According to the government’s dashboard, so far, Rs 451 crore has been invested in the scheme, led primarily by global companies who account for more than Rs 240 crore of the total investment. Additionally, the scheme has generated over 5,000 employment opportunities and sales worth more than Rs 9,000 crore have taken place under the scheme.

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