As the production-linked incentive scheme for telecom manufacturing is set to complete its second year, three telecom equipment manufacturing companies have filed claims for the disbursement of incentives for the 2021–22 fiscal year with the Department of Telecommunications.
As the December 31st deadline to file for claims for the 2021–22 financial year nears, only three companies met the necessary production and investment targets to file claims for the scheme’s first year, according to senior officials at the DoT. However, the deadline has not elapsed, and more companies can apply for claims.
According to the DoT’s announcement on October 2022, the ministry has extended the PLI scheme for telecom networking products to 42 companies. Seventeen of these companies have also applied for an additional incentive for the design-led PLI scheme for 5G networking products announced in 2022. The telecom PLI scheme is effective from April 2021 and will run for five years.
Supply chain issues
The likely reason for the limited number of claims in the first year of the telecom PLI are the global supply chain issues that plagued the manufacturers in FY 2021–2022, which halted the manufacturing process. Moreover, as the launch of 5G services was delayed to October 2022, the major uptick in demand for telecom products came after FY22 concluded. Therefore, telecom equipment makers did not necessarily need to boost their manufacturing that year.
Of the major telecom equipment companies that serve major Indian telecom operators, namely Huawei, Ericsson, Nokia, and Samsung, only Nokia and Samsung have applied to receive incentives from the telecom PLI scheme. Ericsson has not directly applied to the PLI. American electronics manufacturer Jabil, which manufactures equipment for Ericsson, has applied for the PLI.
The senior DoT officials did not disclose the names of the three companies that applied for claims. DoT has extended the PLI Scheme for Telecom and Networking Products to 42 beneficiaries, with a total committed outlay of ₹4,115 crore.