Cabinet approves PLI scheme for telecom, network equipment companies

NEW DELHI: The Union Cabinet on Wednesday approved the keenly awaited Production Linked Incentive (PLI) scheme for Telecom and Networking Products with a budgetary outlay of Rs 12,195 crore over five years. The government expects this measure to counter imports worth Rs 50,000 crore and make India a production hub of such equipment ahead of the crucial 5G network implementation.

Telecom Minister Ravi Shankar said, “As a result of PLI scheme for telecom equipment, government hopes to have incremental production of Rs 2,44,200 crore in the sector, exports worth Rs 1,95,360 crore, 40,000 new jobs, and Rs 17,000 crore worth of tax revenue in the coming five years.”

He added that the decision is aimed at making India “a global hub of manufacturing telecom equipment including core transmission equipment, 4G/5G Next Generation Radio Access Network and Wireless Equipment”

The Scheme, which will be implemented from April 1, 2021, is also expected to attract foreign direct investment of more than of Rs 3,000 crore. Prasad also said that government will soon come up with a PLI scheme to encourage the production of laptops and tablet PCs.

Support under the scheme will be provided to entities engaged in the manufacturing of specified telecom and networking products in India. Eligibility will be further subject to  the achievement of a minimum threshold of cumulative incremental investment over a period of four years, and incremental sales of manufactured goods net of taxes (as distinct from traded goods) over the Base Year 2019-2020.

There will be a minimum investment threshold of Rs 10 crore for MSME with incentives from 7 per cent to 4 per cent and Rs 100 crore for others with incentives from 6 per cent to 4 per cent over five years above the mandated base year.

Government offers sops to woo large investors

The applicants with higher investments than the specified thresholds for the MSME and non-MSME categories will be selected through a transparent process. Once qualified, the investor will be incentivized up to 20 times of minimum investment threshold