New Delhi, October 6: With the Production Linked Incentive (PLI) scheme for telecom and networking equipment manufacturing expiring by March 2027, the goverment is aiming to launch a revamped version with a proposed outlay of ₹6,000 to ₹7,000 crore, sources within the government have told the media.
The Department of Telecommunications (DoT) notified the original Telecom PLI scheme in February 2021, allocating ₹12,195 crore to incentivize domestic manufacturing and reduce import dependencies. However, the outcome wasn’t as per expectations, though the program attracted over ₹4,081 crore in investments and generated sales exceeding ₹78,670 crore.
The performance of the scheme has remained fairly uneven, with many Micro, Small, and Medium Enterprises (MSMEs) facing challenges with global supply chain volatility and high capital requirements.
Until now, a substantial portion of the production was focused on assembly, with imports of knock-down units made rather than creating genuine value addition.
The proposed five-year extension aims to address these limitations by targeting ₹3 trillion in total sales, ₹1.5 trillion in cumulative exports, and the creation of approximately 9,000 direct specialized jobs.
To further sweeten the deal, the government is looking to lower incremental investment thresholds for MSMEs, offer quarterly incentive disbursements, and encourage design-led manufacturing, as it looks to develop a domestic component ecosystem and drive backward integration.
“Last time, it was the end product because we were nowhere. First, you start the domestic ecosystem with the end product of the last part of the value chain. That’s the easiest to get in assembly. Then you want backward integration. So this time the focus will be on this piece,” an official involved in the matter told Moneycontrol anonymously.
“The outlay is ‘pretty sizable’ with an in-principle nod by the expenditure. It is somewhat real now. Because the scheme expires in March 2027, the intention is to try to have it in place by Q1 of the next fiscal year,” he added.
