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The government on Wednesday approved a ₹12,195-crore Production-Linked Incentive (PLI) scheme for telecom gear manufacturing in India.
Eligibility under the Production-Linked Incentive (PLI) scheme for telecom equipment manufacturing will besubject to achievement of a minimum threshold of cumulative incremental investment over four years and incremental sales of manufactured goods net of taxes (as distinct from traded goods) over the base year 2019-2020, a government statement said.
The cumulative investment can be made at one go, subject to annual cumulative threshold prescribed for four years being met.
Investment threshold
There will be a minimum investment threshold of ₹10 crore for MSME with incentives from seven per cent to four per cent and ₹100 crore for others with incentives from six per cent to four per cent over five year above base year. The applicants with higher investments than specified threshold under MSME and non-MSME categories will be selected through a transparent process.
With this scheme, India will be well positioned as a global hub for manufacturing of telecom and networking products. Incremental production of around ₹2 lakh crore is expected to be achieved over five years. India will improve its competitiveness in manufacturing with increased value addition, Ravi Shankar Prasad, Minister for Communications and IT, said while briefing the media after the Cabinet meeting.
Globally telecom and networking products exports represent $100 billion market opportunity, which can be exploited by India. With support under the scheme, India will augment capacities by attracting large investments from global players and at the same time encourage promising domestic champion companies to seize the emerging opportunities and become big players in the export market.
According to analysts tracking the sector, these incentives come close on the heels of PLI scheme announced for mobile phone manufacturing last summer and would help build a comprehensive telecom ecosystem in India across the value chain —from mobile phone component manufacturing to network equipment.
Boost for MSME
“Unlike the PLI scheme for mobile phone manufacturers, MSMEs would also be eligible for incentives under this scheme as the minimum investment threshold for MSMEs has been pegged at ₹10 crore over a period of five years. This is the first of 10 PLI schemes expected to be launched by April 1 that have received in-principle approval from the Cabinet,” Nischal S Arora, Partner, Nangia & Co LLP, said.
A big positive to invigorate ecosystem play for value addition and boost MSME market play in digital — core transmission equipment and IoT devices. With thrust on right segments and an enabling environment, India is well positioned to attract global investments and propel towards a trillion dollar digital economy in the next two to three years,” Prashant Singhal, Emerging markets – Telecom, Mobile Technology, leader, EY, said
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