The production-linked incentive (PLI) of ₹12,195 crore set aside for telecom equipment manufacturing will encourage Indian as well as global companies to produce in the country, said telecommunications, electronics and IT minister Ravi Shankar Prasad. The incentive will also support these manufacturing firms to export from India, he added.
The Cabinet on Wednesday approved PLI scheme for 10 more sectors to the tune of ₹2 lakh crore after it was first rolled out for mobile phone manufacturing in April. “The government today approved PLI for 10 more sectors, which will not only boost manufacturing in India but also encourage exports and create jobs,” Prasad said in a Twitter post.
India is one of the largest telecom markets in the world and mostly depends on global firms—Sweden’s Ericsson, Finland’s Nokia, South Korea-based Samsung, and ZTE and Huawei from China—for its equipment requirements.
The Cellular Operators Association of India (COAI) welcomed the move, saying that the PLI scheme will enable faster and easier business in the sector. The industry body for telecom operators said it is yet to receive details of the PLI scheme from the department of telecommunications.
“We are confident that the government would have designed the scheme in such a manner to ensure that the demand for telecom equipment from the local market is enhanced and remains robust as well as exports from India are suitably supported and incentivised,” said SP Kochhar, director general, COAI.
Apart from electronics and telecom, PLI for other sectors will boost economic growth, support Prime Minister Narendra Modi’s goal of Aatma Nirbhar Bharat (self-reliant India) and create employment opportunities for the youth, Prasad said in another Twitter post.
Automobile and auto-components industries have been allocated the highest PLI at ₹57,042 followed by advanced chemistry cell battery, pharmaceuticals and textile sectors.
The aim is to give the right impetus to the Indian economy to enable the nation to plug into global supply chains, said finance minister Nirmala Sitharaman, who along with information and broadcasting (I & B) minister, Prakash Javadekar, announced the Cabinet decision.There is no cap on the number of firms eligible for PLI under each category for now, she said.
The manufacturing sector currently contributes 16% to India’s GDP, Javadekar said, adding that the idea is to increase this share.