Production-Linked Incentive Scheme Can Boost Telecom Sector: Know-How

The production-linked incentive (PLI) scheme is expected to support radio access networks and investments in 5G services. The PLI scheme is likely to help telecom companies to reduce their dependence on imports and global vendors, as per Crisil's new report.

According to the report, telecom companies are importing 75 to 85 percent of the equipment despite some global vendors having their manufacturing plants in the country. But still, companies are importing equipment from Vietnam, China, Malaysia, and South Korea.

Production-Linked Incentive Might Improve Heath Of Telecom Sector

However, the firm said that the PLI scheme for the telecom sector will boost or increase domestic manufacturing. In addition, the PLI scheme has the ability to attract investment in the manufacturing of telecom and networking products.

Under the same scheme, 20 companies are expected to be shortlisted in domestic firms. These firms include 10 MSMEs and 10 non-MSMEs. Also, the report added that the shortlisted companies will get the incentive for the sales. Besides, the Government has announced Rs. 12,200 crores investment for the scheme.

"Through PLI, our objective is to boost local production of telecom equipment, reduce dependency on imports and provide an opportunity to domestic manufacturers to focus on exports as well. India wants to make for the world also," a DoT official was quoted by PTI.

Investments In 5G Might Increase

Additionally, the report pointed out that 5G networks are likely to receive high investments as the network requires four to 20 higher radio site deployments compared to 4G. This clearly shows that 5G networks need high investment in optical along with radio networks.

The firm also highlighted that the PLI scheme is covering all major telecom equipment might allow domestic gear manufacturers to get Rs. 50,000 crores market opportunity and is likely to be double by 2025. Surprisingly, 25 companies have already registered for the scheme.

"25 companies have registered for the PLI scheme till date. We have received interest from big companies as well. They are expected to apply before the deadline ends," sources added. It is important to note that the PLI scheme is going to help 5G upcoming services and might give a boost to the entire telecom sector.