In a push to fast track the proposed production-linked incentive (PLI) scheme in India, the Department of Telecommunications (DoT) has opened up applications for telecom equipment and networking products manufacturers to apply for the PLI scheme under which ten large manufacturers and ten MSMEs will be selected to receive rewards.
Under the PLI scheme, Rs 12,195 crore will be disbursed as incentives to the qualifying companies over a five-year period by achieving stipulated production targets. Of this, Rs 1,000 crore has been set aside for the ten MSMEs, three out of which will be domestic companies.
Earlier in April, DoT announced that Ericsson and Nokia were keen to expand their existing operations in India for global supply chains, while Samsung, Cisco, Ciena, and engineering manufacturing service companies like Jabil USA, Foxconn Taiwan, Sanmina USA, and Flex USA have shown interest in setting up manufacturing units in India.
Local companies including HFCL, Coral Telecom, Sterlite, Dixon, and VVDN Technologies also plan to expand their facilities. Bharti Enterprises said separately it is forming a joint venture with Dixon to make telecom equipment and avail of the benefits of the scheme.
As per the guidelines, non-MSMEs will be eligible for incentives ranging from 4% to 6% of incremental production in a year. The scheme offers a higher incentive of 4%-7% to micro, small and medium enterprises that must invest Rs 10 crore, while large companies have an investment threshold of Rs 100 crore. FY19-20 will be treated as the base year, while the five-year period will begin from April 1, 2021.
The last date to apply is July 3, 2021. The scheme will cover products such as 4G/5G next-generation radio access networks, IoT devices, customer premises equipment, routers, and switches
The applications will be short-listed from highest to lowest on the basis of committed cumulative incremental investment during the scheme period.
The investor must achieve net incremental sales equal to three times the amount invested that year to qualify for incentives. The upper ceiling for these targets is capped at 20 times the amount invested.
“It is estimated that full utilization of the Scheme funds is likely to lead to incremental production of around ₹ 2.4 Lakh Crores with exports of around ₹ 2 Lakh Crores over 5 years. It is also expected that the Scheme will bring an investment of around ₹ 3,000 crores and generate huge direct and indirect employment,” DoT said.
The government has appointed the Small Industries Development Bank of India (SIDBI) as the Project Management Agency (PMA) for the PLI scheme.