Cisco, Ciena, Samsung, Foxconn, Flex, Nokia and Ericsson, which want to finalise their local production plans under the telecommunication equipment production-linked incentive (PLI) scheme, fearing that they will lose out on four months while waiting for the detailed guidelines and approvals.
The scheme became effective on April 1 but the organisation don’t expect the approval letters to come in before July, with the whole procedure of selection and disbursement of final clearances likely to take time, executives at three of the organisations mentioned. However, a senior Department of Telecommunications official stated ET the basic incentive structure and names of the organisations interested have already announced.
“The guidelines are also in final stages and will be released in short time. The department working had been halted in the past because of the harsh Covid spread,” the official mentioned.
The official did not comment on the apprehensions of organisations over missing out on the production targets.
“The final guidelines are important for us to understand the business scenario and make the production commitment,” said by one executive . “We believe production will not start for another quarter given the poor state of manufacturing operations across sectors.”
Samsung, Foxconn, Flex, Nokia and Ericsson did not respond to ET’s queries while the other organisations could not be reached straight away for comment.
DoT announced the PLI for local manufacture of telecommunications equipment and network hardware in month of February, with Rs 12,195 crore to be expend over five years and incentives ranging from 4% to 6% of incremental production in a year. The scheme offers high incentive of 4%-7% to micro, small and medium organisations that must invest Rs 10 crore, while large organisations have investment threshold of Rs 100 crore.
The scheme will cover the products like 4G/5G next-generation radio access networks, IoT devices, customer premises equipment, routers and switches.
DoT mentioned in April that Ericsson and Nokia were eager to expand their existing operations in India for the global supply chains, while Samsung, Cisco, Ciena and engineering manufacturing service organisations such as Jabil USA, Foxconn Taiwan, Sanmina USA, and Flex USA have shown interest in setting up production units in India. The government expects the scheme to attract an investments of more than RS 3,000 crore, generate incremental production of Rs 2.4 lakh crore, with exports of about Rs 2 lakh crore over five years.