The Union government on Thursday cleared a Rs 12,195-crore production-linked incentive (PLI) plan for telecom gear manufacturing in India, a move that is likely to reduce reliance on Chinese made telecom gears and further help in technology transfer for production of telecom equipment in India.
The new scheme, part of the Union government's ambitious #Aatmanirbhar Bharat programme is also likely to promote governments ‘Make in India' programme. Also, this will help Indian companies develop indigenous 5G technology for its future roll-out. According to a recent Parliamentary panel on IT report, India plans to start 5G trials later this year and looks to roll out limited 5G services by 2022.
The new scheme also comes at a time when border tensions with China are at its peak, which has impacted the trade between the two countries to a large extent. Many believe that the government's announcement for a PLI scheme is part of the strategy to derail technology equipment imports from China further.
The Union government is also encouraging local companies to procure 5G technology for rollout in India to restrict Chinese technology giants Huawei entry in 5G roll out in India. Meanwhile, the Union cabinet in a statement said that the new step is expected to encourage the production of equipment worth Rs 2.4 lakh crore and create direct and indirect employment for about 40,000 people.
According to the government notification, the new scheme is likely to be operational from April 1. “In the coming five years, we hope to have incremental production of Rs 2.4 lakh crore, exports worth Rs 1.9 lakh crore, direct and tax revenue of approximately Rs 17,000 crore for the exchequer,” Telecom and IT minister Ravi Shankar Prasad said.
The new government scheme is expected to drive in new investments of over Rs 3,000 crore.