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Modi govt okays Rs12,195 crore scheme to boost telecom gear production

The union cabinet approved a Rs 12,195 crore ($1.68 billion) plan to provide financial incentives for local telecom equipment manufacturing

The union cabinet on Wednesday approved a Rs 12,195 crore ($1.68 billion) plan to provide financial incentives for local telecom equipment manufacturing, according to an government statement. 

The scheme is part of Prime Minister Narendra Modi’s big push to boost electronics manufacturing in India and create jobs as part of the Aatamnirbhar Bharat campaign.

The Production Linked Incentive (PLI) Scheme intends to promote manufacture of Telecom and Networking Products in India and proposes a financial incentive to boost domestic manufacturing and attract investments in the target segments of telecom and networking products in order to encourage Make in India. The scheme will also encourage exports of telecom and networking  products 'Made in India,' the official statement said.

It is expected that the scheme will bring more than Rs 3,000 crore investment and generate huge direct and indirect employment, the statement said.

Support under the Scheme will be provided to companies engaged in manufacturing of specified telecom and networking products in India. Eligibility will be further subject to achievement of a minimum threshold of cumulative incremental investment over a period of four years and incremental sales of manufactured goods net of taxes over the base year 2019-2020. The cumulative investment can be made at one go, subject to annual cumulative threshold as prescribed for four years being met.

Globally Telecom and Networking Products exports represent an $100 billion market opportunity, which can be exploited by India. With support under the scheme, India will augment capacities by attracting large investments from global players and at the same time encourage promising domestic champion companies to seize the emerging opportunities and become big players in the export market, the statement said.

There will be a minimum investment threshold of Rs.10 crore for MSME with incentives from 7% to 4 % and Rs. 100 crore for others with incentives from 6% to 4 % over 5 year above Base Year. The applicants with higher investments than specified threshold under MSME and Non MSME categories will be selected through transparent process.

With this scheme, India will be well positioned as a global hub for manufacturing of Telecom and Networking Products. Incremental production around Rs. 2 lakh crore is expected to be achieved over 5 years. India will improve its competitiveness in manufacturing with increased value addition.

Through this policy, India will move towards self-reliance. By incentivizing large scale manufacturing in India, domestic value addition will increase gradually. Provision of higher incentive to MSME will encourage domestic telecom manufacturers to become part of the global supply chain.