Govt to provide Rs 4,000 crore incentive for design-led manufacturing in Telecom
Jun 20, 2022
New Delhi [India], June 20 : The government has proposed to provide Rs 4,000 crore incentive to promote design-led manufacturing in telecom sector under the production-linked incentive (PLI) scheme, the Ministry of Communications said on Monday.
With the objective to build a strong ecosystem for 5G, the Union Budget 2022-23 has proposed to launch a Scheme for design-led manufacturing as part of the existing PLI Scheme. After consultations with stakeholders, the Guidelines for the PLI Scheme for Telecom & Networking Products have been amended to introduce the Design-led Manufacturing with additional incentive rates, the ministry said in a statement.
The Department of Telecommunications (DoT) had notified the Production Linked Incentive (PLI) Scheme on February 24, 2021, with a financial outlay of Rs 12,195 crore. A total of 31 companies, comprising of 16 MSMEs and 15 Non-MSMEs including 8 domestic and 7 global companies were given approval on October 14, 2021.
"DoT based on feedbacks from stakeholders including the selected PLI Applicants has decided to extend the existing PLI Scheme by one year," the statement said.
The existing PLI beneficiaries will be given an option to choose financial year 2021-22 or financial year 2022-23 as the first year of incentive.
DoT has also approved addition of 11 new telecom and networking products to the existing list, based on suggestions from the stakeholders.
For promoting design-led manufacturing, the Department of Telecommunications (DoT) is inviting applications from Design-led manufacturers as well as others, for availing incentives under the PLI Scheme for five years commencing from April 1, 2022. The investment made by successful applicants in India from April 1, 2022 onwards and up to Financial Year (FY) 2025-2026 shall be eligible, subject to qualifying incremental annual thresholds.
The Scheme is open to both MSME and Non-MSME companies including domestic and global Companies. The applications from design-led manufacturers shall be prioritized over other manufacturers while shortlisting.
The design-led manufacturing is primarily aimed to support efforts for designing telecom products in India. It will recognize and encourage R&D-driven manufacturing in the country to enhance its contribution to the global value chain as envisaged in the National Digital Communication Policy, 2018.
Applicants will have to satisfy the minimum Global Revenue criteria to be eligible under the Scheme. The Company may decide to invest for single or multiple eligible products. The Scheme stipulates a minimum investment threshold of Rs 10 crore for MSME and Rs 100 crore for non-MSME applicants. Land and building costs will not be counted as investments, the ministry said.
Eligibility shall be further subject to Incremental Sales of Manufactured Goods (covered under Scheme Target Segments) over the base year (FY2019-20). The allocation for MSME has been enhanced from Rs 1,000 crore to Rs 2500 crore, it added.
The ministry said the interested eligible applicants can start the registration process for the Scheme on 21st June 2022. The Application window shall be open for 30 days i.e. up to 20th July 2022. These applications are invited for the balance fund of more than Rs 4,000 crore. This will give a boost to the manufacturing of telecom and networking products to develop 5G ecosystem for India.
