This PLI scheme will come into effect from 1 April 2021. Currently, India imports telecom equipment worth Rs 50000 crore annually. Actually, the government wants to ban the import of telecom equipment in the country, so that the telecom equipment can be promoted in the country itself.
A large PLI Scheme package for the telecom sector has been announced in the Central Cabinet meeting. In the meeting of the Union Cabinet on Wednesday, the production linked initiative (PLI) scheme of Rs 12,000 crore for the telecom sector has been approved. The benefit of this scheme will benefit the companies manufacturing telecom equipment. This PLI scheme will come into effect from 1 April 2021. Currently, India imports telecom equipment worth Rs 50,000 crore annually. Actually, the government wants to ban the import of telecom equipment in the country, so that the telecom equipment can be promoted in the country itself.
The Cabinet approved PLI Scheme for manufacturing telecom equipment, including core transmission equipment, 4G/5G next-generation radio access network and wireless equipment, access and customer premises equipment, Internet of Things-access devices, other wireless equipment, and enterprise equipment like switches, routers, etc.
The scheme will be operational from April 1 this year. The eligibility for the scheme will be subject to achieving a minimum threshold of cumulative investment and incremental sales of manufactured goods, said the Ministry of Communication and Information Technology in a statement. 2019-20 will be treated as the base year for computation of cumulative incremental sales of manufactured goods net of taxes, it added.
The scheme also has higher proposed incentives for micro, small and medium enterprises (MSMEs). For MSMEs, the government has proposed 1 percent higher incentive in the first three years. The minimum investment threshold for MSMEs has been kept at Rs 10 crore; for others, at Rs 100 crore.
An investor who qualifies for the scheme will be incentivised up to 20 times the minimum investment threshold, enabling them to utilise their unused capacity, said the government statement.
Spurred by the incentives provided under PLI last year, global brands such as Apple Inc, through its vendors, and Samsung lined up to participate in the scheme, which offered incentives of 4-6 per cent for five years on mobile phones priced over $200, provided companies committed to incremental investment and production every year. It considers 2020 as the base year.
The government hopes to find similar success in other areas by providing similar incentives for boosting manufacturing of mobile devices.
“We welcome the government’s progressive PLI norms to boost local manufacturing of telecom equipment and build India as a global manufacturing hub. Nokia is already making in India a range of telecom equipment, from 2G to 5G, for domestic as well as global markets. We hope these incentives will give the right impetus to the telecom manufacturing ecosystem in the country,” said a spokesperson for Nokia.
The PLI scheme for mobile manufacturing was set in motion, with 16 project approvals last July. According to internal estimates, the scheme, if successful, has the potential to raise local value addition for feature phones to 70-80 percent and for smartphones to over 35 percent.
PLI scheme will soon come for tablets and laptops
Union Minister Ravi Shankar Prasad has announced this. In a press conference after the cabinet meeting, Union Communications Minister Ravi Shankar Prasad said that the government wants to make India the global powerhouse of manufacturing. For this, the atmosphere of Ease of Doing Business in the country is being prepared by the government. In this series, the Production Linked Initiative (PLI) scheme of Rs 12,000 crore has been approved under the Telecom Equipment Manufacturing in the Union Cabinet meeting.
The government hopes that the scheme will produce telecom equipment worth Rs 2,44,200 crore in the country in the next five years. Also, telecom equipment worth Rs 1,95,360 crore will be exported in the country. The minister said that the government will soon come up with a PLI scheme, which will help in increasing the production of laptops and tablets in the country.