PLI for telecom: DoT says to take into account selected companies’ investment, production starting April 1

The Department of Telecommunications (DoT) will take into account the incremental investment and production starting April 1 for the companies which would be selected under the Production Linked Incentive (PLI) for telecom equipment manufacturing, as per a Financial Express report.

“We are trying to issue the guidelines this week. But for companies, it should not be a concern as they can plan their investment and production for the PLI scheme and selected companies will get the benefit effective April 1,” as per DoT sources cited by the publication.

To be clear, the clarification from the telecom department has come after certain companies expressed their concerns over the delay in the issuance of guidelines.

They argue that two months of the current fiscal have already passed and the selection of companies has not yet started in the absence of guidelines. A further delay would translate into a smaller window for meeting targets, they said.

The sources underscored that senior officials engaged with the PLI scheme have been down with Covid-19, in addition to their family members.

Further, a senior officer handling the incentive scheme has been assigned an additional charge in the health ministry to coordinate with oxygen supply which has further added to the delays.

Notably, global equipment makers such as Cisco, Nokia, Ericsson, Jabil as well as contract manufacturers Flex, Dixon Technologies, and Foxconn have expressed their interest in applying for the scheme, which came into effect on April 1, 2021.

The companies can formally apply once the guidelines are notified.

Also, Dixon has inked a partnership with Bharti Enterprises Ltd to form a joint venture (JV) to manufacture telecom and networking products like modems, routers, set-top boxes, Internet of Things (IoT) devices for the telecom sector, including Airtel, ET previously reported.

The PLI scheme of Rs 12,195 crore will offer incentives in the range between 4-7% for different equipment categories and years, with FY 2019-20 as the base year for calculating the total incremental sales.

As per media reports, the draft guidelines for the scheme, companies committing higher investment amounts will stand a better chance at qualifying for the scheme. The minimum investment amount for MSMEs has been kept at Rs 10 crore and for others at Rs 100 crore.

The scheme covers core transmission equipment, 4G/5G next-generation radio access network and wireless equipment, access and customer premises equipment (CPE), Internet of things (IoT) access devices, other wireless equipment and enterprise equipment like switches, routers, etc.