Building 5G Ecosystem In India: Telecom PLI Scheme Amended To Include Design-led Manufacturing, Gets A Year’s Extension

The Department of Telecommunications (DoT) has announced an incentive scheme for design-led manufacturing.

Raison d'être. Incentivising design-led manufacturing is primarily aimed at supporting efforts for designing telecom products in India.

It will encourage R&D-driven manufacturing in the country and, thereby, enhance India’s contribution to the global value chain, as envisaged in the National Digital Communication Policy, 2018.

This year’s budget set it up. To build a strong ecosystem for 5G, the Union budget 2022-23 had pitched a scheme for design-led manufacturing to be part of the existing production-linked incentive (PLI) scheme for the telecom sector.

A quick note on the PLI scheme.

• The DoT had notified the PLI scheme for telecom and networking products on 24 February 2021, with a financial outlay of Rs 12,195 crore.

• Thirty-one companies — 16 MSMEs and 15 non-MSMEs, including eight domestic and seven global companies — were given approval on 14 October 2021.

Now, guidelines are amended for the PLI scheme for telecom and networking products to introduce and incentivise design-led manufacturing.

• An additional incentive rate of 1 per cent over and above existing incentive rates is provided.

• The scheme is open to both MSME and non-MSME companies, including domestic and global players.

• Applications are invited from 21 June, until 20 July, for incentives of more than Rs 4,000 crore.

• Applications from design-led manufacturers will be prioritised over other manufacturers at the time of shortlisting.

The amendment closely follows 5G auction nod.

• On 15 June, the Cabinet, chaired by PM Narendra Modi, approved a DoT proposal to conduct a spectrum auction.

• The spectrum will be assigned to successful bidders for providing 5G services to the public and enterprises.

• A total of 72,097.85 MHz of spectrum, with a validity period of 20 years, will be put to auction.

• The auction will be held by the end of July this year.

A couple more changes.

• The DoT has also decided to extend the existing PLI scheme by one year.

• Inclusion of 11 new telecom and networking products to the existing list has been approved.

Ultimately, these moves will hopefully provide an impetus to the manufacturing of telecom and networking products, so as to develop and strengthen the 5G ecosystem in India.