Telecom equipment manufacturers are poised to receive relief as the government plans to roll out incentives to boost their production capacity, aiming to decrease reliance on imports from overseas. Valued at Rs 400 crore, the incentives are slated for release within a week to selected firms following thorough verification. According to a source familiar with the matter on February 20th, the government has already disbursed incentives to a few companies, with additional allocations scheduled soon.
The government’s pivotal decision follows appeals from telecom equipment manufacturers to incentivize increased value addition in manufacturing, primarily to diminish reliance on imports. Notably, some companies have been manufacturing fixed wireless access equipment, anticipating high demand in both domestic and international markets. The government’s objective is to foster self-reliance among manufacturers and bolster domestic production, thereby curbing extensive imports and stimulating investment in the sector.
Many players, including HFCL and Tejas Networks, are actively engaged in telecom equipment manufacturing domestically, while others express interest in similar endeavors. Despite a rise in local production, the industry still heavily relies on imported components. Stakeholders urge the government to extend support for local component manufacturing, emphasizing the need for local players to achieve scalability.
Moreover, the government envisions local telecom equipment manufacturers becoming primary suppliers to major Indian telecom giants like Bharti Airtel, Vodafone Idea, and Reliance Jio, with an eye on expanding exports. Ministry officials are receptive to industry demands and plan to engage in further discussions to advance manufacturing capabilities. While existing policies exist, considerations for incentives to promote local component manufacturing are under review, expected to accelerate ecosystem development.
The government initiated the production-linked incentive (PLI) scheme for telecom and networking products manufacturing in India in February 2021, allocating Rs 12,195 crore. As of July, the scheme has attracted investments totaling Rs 1,800 crore, contributing to a production output of Rs 22,000 crore and exports valued at Rs 6,700 crore during the financial year.
