Thomas K Thomas

Big plans


equipment demand estimated at $40 billion by 2010.


support for parks, fiscal sops favoured.


tie-ups with vendors for more local value addition proposed.

New Delhi, July 24

In a bid to make India a hub for telecom equipment manufacturing, Department of Telecom's (DoT) sub group on telecom equipment manufacturing has proposed a slew of initiatives for XIth Five Year Plan, including setting up of hardware manufacturing cluster parks.

Other measures proposed include fiscal incentives for local manufacturing and setting up a mega fab for manufacture of integrated circuits.

According to the draft proposal, the Government may also consider providing financial support for the development of core common infrastructure in such parks for telecom equipment manufacturing.

The Government could provide an amount equivalent to 5 per cent of the total investment by the developer subject to a maximum of Rs 50 crore. However, companies wanting Government support should invest at least Rs 100 crore in an area of 10 hectares, the draft proposal said.

It is expected that there will be requirement of telecom equipment worth $40 billion by 2010. "The combined domestic and export volumes can offer a tremendous potential for telecom manufacturing in India."

Domestic Demand

"Considering that 75 per cent of the demand would be met through indigenous manufacturing and an export potential of $10 billion, total telecom equipment production target could be $40 billion. The domestic demand of telecom equipment would be about $10 billion per annum from 2010 onwards," said a DoT official.

On fiscal measures, the proposal has recommended to provide abatement for products designed and manufactured in India. It is also proposed that domestic manufacturers may be allowed to have access to extra commercial borrowings for capital expenditure and working capital requirement.

For achieving higher degree of local value addition, the sub group has proposed that the Government could get into strategic alliance with vendors such as LG, Samsung and Nokia, and facilitate setting up of fab by announcing special package of incentives.

(This article was published in the Business Line print edition dated July 25, 2006)
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