Government Introduces Rs. 12,195 Crore PLI Scheme For Telecom Sector

In order to encourage telecom equipment manufacturing, the Indian Government has introduced the production-linked incentive scheme (PLI) of Rs. 12,195 crore. The incentive scheme is likely to help these manufacturing firms to increase exports from India in the coming years.

The PLI scheme is expected to support 4G and 5G networks and other wireless equipment. The new development comes at that time when countries like Australia, the US, Japan, and the United Kingdom have banned Chinese equipment maker Huawei and ZTE.

In addition, the scheme is likely to help the manufacturing of other sectors like the Internet of Things and routers. Apart from clearing the PLI scheme for the telecom sector, the government has cleared similar packages for 10 sectors.

"The government today approved PLI for 10 more sectors, which will not only boost manufacturing in India but also encourage exports and create jobs," telecommunications, electronics, and IT minister Ravi Shankar Prasad said.

Notably, the Indian telecom market is dependent on global firms like Nokia, Samsung, Ericsson, Huawei, and ZTE for the equipment. Meanwhile, industry body COAI has welcomed the move and said that the PLI scheme will fast the business in the telecom sector. However, it said that it is still waiting for the details of the scheme.

"We are confident that the government would have designed the scheme in such a manner to ensure that the demand for telecom equipment from the local market is enhanced and remains robust as well as exports from India are suitably supported and incentivized," said SP Kochhar, director general, COAI.

The main reason behind giving incentives to the sector is to help the economy as this is the second time that the government has announced similar offers to increase mobile manufacturing in the country. The PLI scheme for mobile manufacturing is likely to help domestic firms.