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The department of telecom (DoT) has approved 42 companies, including Nokia, Samsung and Tejas Networks, for receiving benefits under the design-led production-linked incentive (PLI) scheme for manufacturing telecom and networking products.
The latest list also includes Flextronics, VVDN, Jabil and HFCL, apart from 28 micro, small and medium enterprises.
The scheme is crucial to strengthen the value chain of multiple verticals of 5G equipment. For these, India mainly depends on imports.
The companies have committed a cumulative investment of Rs 4,115 crore, the DoT said.
It added that this is expected to generate additional sales of Rs 2.45 trillion and create employment of more than 44,000 during the scheme period.
The scheme provides additional incentive of 1 per cent over and above the existing incentives for products that are designed and manufactured in India.
On Monday, the government said 17 companies are there in the latest list to apply for the PLI.
The government had notified the PLI scheme last February with an allocation of Rs 12,195 crore. Thirty-one companies were selected under the scheme last October.
The beneficiaries can select either 2021-22 or 2022-23 as the first year for availing incentives. Back in May, the scheme was extended by a year, and its scope expanded to cover design-led manufacturing.
The Centre had also decided to provide additional incentives of over Rs 4,000 crore under the amended scheme. In effect, the policy was tweaked with the aim of building a strong ecosystem for 5G.
The following month, applications were invited from design-led manufacturers and others. They could avail incentives for five years starting April 1, 2022.
Existing companies under the PLI scheme for telecom and networking products were allowed to add more products and apply under the design-led PLI scheme.
They were also given the benefit of shifting their five-year PLI scheme period by one year.
Twenty-two companies availed this opportunity of shifting their first year. This includes 13 companies, which were fresh applicants.
Strict criterion
Earlier this year, the government had admitted that the decision to amend the scheme was taken following consultation with stakeholders. They had complained of stiff incremental and production targets for the first year, that is, 2021-22.
Currently, applicants have to satisfy the minimum global revenue criteria to be eligible under the scheme. Companies can invest in single or multiple eligible products.
The scheme stipulates a minimum investment threshold of Rs 10 crore for MSMEs and Rs 100 crore for non-MSME applicants. Land and building costs will not be counted as investment.
The eligibility is also subject to higher sales of manufactured goods over the base year (FY19-20). The allocation for MSMEs had also been enhanced from Rs 1,000 crore to Rs 2,500 crore.
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