Telecom Equipment Makers Believe PLI Scheme For Design-Led 5G Initiatives Will Make India Global Manufacturing Powerhouse

The Production Linked Incentive (PLI) programme for design-led 5G production, according to multinational telecom gear makers, will position India as a global manufacturing hub and allow them to expand their manufacturing capabilities in the country.

Finland's Espoo-based Nokia said that it is looking into cost-competitive manufacturing prospects in India to service both the local and global markets. The business was on pace to meet its investment and production targets under the PLI plan, according to a Nokia India representative, reported Economic Times.

Nitin Bansal, managing director for Ericsson in India, told ET that The PLI scheme's design-led 5G initiatives would improve the 'Make in India' push and help the country become a global manufacturing hub. However, in a separate statement, Ericsson claimed that by 2025, a 5G spectrum auction with 100 per cent fiberisation and a Public-Private-Partnership (PPP) model will assist bridge the digital divide for the country's inclusive development in line with the 'Digital India' goal.

According to NEC Corporation, a Japanese multinational, fiberization will strengthen telecom infrastructure to accommodate 5G communication technologies. Aalok Kumar, President and CEO, NEC Corporation India said: “The proposed PLI scheme for design-led manufacturing for the 5G ecosystem will also fast track rollout.”

Similarly, David Li, CEO, Huawei India said: “It also looks at boosting the economy with provisions for the start-up ecosystem, infra, clean energy. The focus on skilling, digital learning and clean mobility will create opportunities for Indian youth and will also go a great way in addressing the skill gap in various industries leading to inclusive development.”

According to KG Purushothaman, Partner and Telecom Sector Leader at KPMG in India, the Budget 2022 has given the telecom sector hope. He noted that the government's promise to launch 5G by FY23, as well as new PLI programmes to support 5G equipment production and the improvement of digital infrastructure, will provide the sector a boost.

PLI Scheme

Under the telecom equipment PLI plan, the telecom department approved 31 bids totalling Rs 3,345 crore over four and a half years. Nokia India, Ericsson's Jabil subsidiary, HFCL, Dixon Technologies, Flextronics, Foxconn, Coral Telecom, VVDN Technologies, Tejas Networks Akashastha Technologies, and GS India were among the firms chosen for the PLI scheme.

During the budget session, the Union Finance Minister Nirmala Sitharaman announced the introduction of a PLI scheme aimed at design-led production of 5G equipment. A senior official told ET, the finances for the PLI scheme will come from the already existing telecom equipment PLI scheme.

The telecom equipment PLI has a capital of Rs 12,951 crore, but the government intends to pay incentives worth only Rs 7,400 crore, leaving a surplus.

The official said: “We feel there is a need to incentivise telecom equipment design capabilities in 5G, we need Indian DNA in the design and so we decided to divert part of the (telecom equipment PLI) funds towards it."