Telecom gear maker Nokia and HFCL will participate in the Rs 12,195-crore telecom PLI scheme, for which registration will begin on Friday, company officials said Thursday.
Under the scheme, an investor can get incentive for incremental sales up to 20 times the committed investment, enabling them to reach global scales and utilise their unused capacity and ramp up production.
Both domestic and foreign telecom gear makers called the scheme a boost for the government's Atmanirbhar Bharat (self-reliant India) vision.
"A very encouraging initiative by the government towards making India a global manufacturing hub and Atmanirbhar Bharat.
"Nokia is committed to this vision with our Chennai factory that manufactures telecom equipment from 2G to 5G, making for India and the world," Nokia India tweeted.
A company official, who did not wish to be named, told PTI that Nokia will go through the guidelines and definitely participate in the scheme.
HFCL Managing Director Mahndra Nahata said that the scheme will make telecom equipment manufacturing in the country competitive, reduce imports and increase exports.
"PLI scheme will go long way in achieving the objective of Atmanirbhar Bharat. We will participate in the scheme," Nahata said.
The scheme will be effective from April 1, 2021. Investments made by successful applicants in India from April 1, 2021, onwards and up to the financial year 2024-25 shall be eligible for incentives, subject to qualifying incremental annual thresholds. The support under the scheme shall be provided for a period of five years from FY22 to FY26.
The scheme is expected to bring an investment of over Rs 3,000 crore and generate a tax revenue of about Rs 17,000 crore.
"As the first company to manufacture telecom equipment in India since 1994, we welcome the PLI scheme as it will boost the manufacturing ecosystem in the country," Ericsson India Managing Director Nitin Bansal said.
The Telecom Equipment Manufacturers Association of India (Tema) said the scheme has come at the most appropriate time, when the domestic industry is geared up for starting manufacturing within India.
"We complement the DoT for a very out-of-the-box initiative to reserve three applicants in each category only for domestic companies. This is much-needed effort and will result in Indian global champions with Rs 12,195 crore incentive over next five years.
"One of the great initiatives is that for the first time, Rs 1,000 crore has been earmarked for the MSME (micro, small and medium enterprises) category," Tema Chairman Emeritus N K Goyal said.
Global companies with a turnover of Rs 10,000 crore, domestic companies with over Rs 250 crore turnover, and MSMEs with annual turnover of over Rs 10 crore are eligible to participate in the scheme.
The government expects that the scheme will encourage production of equipment worth Rs 2.44 lakh crore with exports of around Rs 2 lakh crore over a period of five years.
Telecom Equipment and Services Export Promotion Council (TEPC) Chairman Sandeep Aggarwal said the fresh investments under the scheme will give a boost to the economy and also create jobs.
"With the 5G revolution set to kickstart in India, we will require new investments, software and hardware development.
"The PLI scheme will complement the 5G ecosystem. By the time we see an increment in demand, the telecom manufacturing sector will be ready with new products and innovations," Aggarwal said.
According to an earlier announcement made by the government, investments under telecom PLI are expected to create direct and indirect employment for about 40,000 people.
"This is a big policy decision by GoI in making India a global hub for telecom gear. It has come at the most appropriate time, when domestic industry is geared up for starting manufacturing within India.
"This will be a landmark to make India 'Atmanirbhar' (self-reliant) with world-class manufacturing infrastructure," Mavenir Country Head (India) and Regional Vice-President (India and South Asia) Sanjay Bakaya said.
Telecom operators' body COAI said telecom is the backbone of a digitally connected India and initiatives under the PLI scheme will further boost local manufacturing, exports and also create employment opportunities.
"India is already the second-largest telecom market globally, and this will go a long way in making the country a global hub for telecom innovation," COAI Director General S P Kochhar said.
(To receive our E-paper on WhatsApp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)