Domestic telecom equipment manufacturers have said that the government’s move to reduce the local content in electronic/ telecom products to around 20 per cent from 50-60 per cent would hurt the Prime Minister’s “Make in India” programme. Reduction in localisation would impact the local players, they said.

Last week, the Department of Telecommunications (DoT) issued a notice seeking stakeholders’ comments on its proposal to review the requirement of 50-60 per cent local content in electronic/telecom products. “Multiple reports (NITI Aayog, TRAI, MAIT, PLI companies, etc.) highlight that India’s limited component ecosystem poses challenges in achieving 50- 60 per cent local content in electronic / telecom products. Recognising this constraint, the conditions for local content qualification also require a review,” the DoT notice said.

The government, in October 2024, issued the Public Procurement (Preference to Make in India), Order 2017 (called as “PPP-MII Order”), to encourage ‘Make in India’ and to promote manufacturing and production of goods and services in India, with a view to enhancing income and employment.

Accordingly, the DoT notified that the order will be applicable to procurement carried out by all attached or subordinate offices or autonomous bodies under the government of India including government companies (like BSNL, Indian Railways or any department) as defined in the Companies Act, and/or the States and local bodies making procurement under all Central schemes/ Central sector schemes that are fully or partially funded by the Centre.

It will also be applicable in respect of projects wherein funding of goods, services or works is by the Digital Bharat Nidhi (promotes universal access to telecommunication services in underserved rural, remote, and urban areas) to the extent of having been awarded through bids, it had noted.

However, the recent notice by the DoT, if applied, could lead to back-door entry of foreign companies like Nokia or Ericsson, who are calling themselves “deemed domestic” firms since they have facilities in India, said an industry veteran.

“We swear by ‘Make in India’, but is there any strong policy to make in India (for the telecom sector). Yes, they (government) have two (indirect) schemes – PLI (for investing in the sector) and the other is this PPP-MII, which is basically for government procurement. So if these things are missing in the sector, where would ‘Make in India’ go?” said a domestic telecom equipment player requesting anonymity.

“As an association, we feel if we are supporting the “Make in India” programme, then we have to aim for 50-60 per cent so that we come at a level through the next one year or two years. And, if we simply satisfy ourselves with 20 per cent or 10 per cent, then it will be difficult to imagine that we will exceed the value-added content,” NK Goyal, Chairman Emeritus, Telecom Equipment Manufacturers Association of India (TEMA), told businessline.

Published on June 9, 2025