Union Cabinet approves PLI scheme for telecom sector

The Union Cabinet on February 17, 2021, gave its approval to the production-linked incentive scheme worth Rs. 12,195 crores for the telecom sector and network equipment manufacturers over the period of five years. It aims at boosting local manufacturing of the components.

The PLI scheme which aims at making India a global hub for the manufacturing of telecom equipment has been expected to lead to an incremental production of about Rs. 2.4 lakh crores.

Communications Minister Ravi Shankar Prasad informed that the implementation of the scheme in telecom manufacturing will begin from April 1, 2021. He further added that many international investors are keen to come to India and that the government plans on encouraging them as well as the domestic manufacturers.

Today the #Cabinet has approved the PLI scheme for telecom equipment manufacturing in India. To encourage #MakeInIndia in telecom equipment we will be giving incentive of ₹12,195 Crores under this PLI scheme. pic.twitter.com/EtI2RahPWC

— Ravi Shankar Prasad (@rsprasad) February 17, 2021

Objective of the approval:

According to the official release by the ministry, the core component of the Production Linked Incentive Scheme is to offset the import of telecom equipment worth more than Rs. 50,000 crores.

The scheme is expected to bring the exports of the equipment of about Rs. 2 lakh crores over the 5 years and bringing in investments of more than Rs. 3,000 crores.

Approval followed by the success of mobile and component manufacturing:

The Communications Minister Ravi Shankar Prasad while talking about the latest approval mentioned that it was followed by the success of the Production Linked Incentive Scheme related to mobile and component manufacturing.

Under this, investments of Rs.34,000 crores have already been made by some of the top mobile companies. Government further plans on bringing similar incentives for tablet and laptop manufacturing.

Benefiting telecom servicing providers:

As the telecom industry goes through a difficult phase, this step by the central government will surely incentivize the telecom service providers who have been opting for the locally manufactured equipment, thus also saving the substantial cost related to the imports.

Even though there is time to see whether there will be many takers for the PLI scheme, it will surely appear that these developments are on the right path towards self-sufficiency.