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

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The Department of Telecommunications (DoT) extended by one year the manufacturing-related incentive (PLI) scheme for telecommunications companies and amended the scheme to increase the incentive rate by another 1 percent. The amendment comes into effect a few days after the country took its first step towards 5G rollout, as the Union cabinet approved a proposal to accept bids for spectrum auctions.

According to the official announcement, the design-based production scheme is open to both medium and small enterprises (MSMEs) and non-MSMEs, including domestic and global companies. The Department of Transportation also said that design-based manufacturing applications will take precedence over other manufacturers. The scheme requires an investment threshold of Rs 10 crore for MSMEs and Rs 100 crore for non-MSMEs, excluding land and construction costs.

The incentives will be based on increased sales of manufactured goods and range from 4 to 7 percent for different categories over a number of years. MSMEs will receive an additional incentive of 1% in the first, second and third years. The Ministry of Transportation also approved eleven new telecom and network products to the existing list of products that can be produced under the scheme.

“To promote design-driven manufacturing, the DoT is inviting design-driven manufacturers, as well as others, to benefit from the PLI scheme for five years starting April 1, 2022. Investments made by successful applicants in India from 1 April 2022 onwards. and through fiscal year 2025-2026 should be eligible subject to additional annual thresholds,” the Ministry of Communications said in a statement.

The Ministry of Transport notified the PLI scheme for telecom and network products on February 24, 2021 with a financial cost of Rs 12,195 crore over five years. In October, he approved 31 proposals involving an investment of Rs 3,345 crore over the next four and a half years. The shortlist includes organizations such as Nokia India, HFCL, Dixon Technologies, Flextronics, FoxconnCoral Telecom, VVDN Technologies, Akashastha Technologies and GS India

According to the government’s dashboard, Rs 451 crore has been invested in the scheme so far, primarily by global companies accounting for more than Rs 240 crore of the total investment. In addition, the scheme has created over 5,000 job opportunities and over Rs 9,000 crore worth of sales have been made under the scheme.

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