DoT issues operational guidelines for PLI scheme

The Department of Telecom on Thursday issued operational guidelines for the ₹12,195 crore performance-linked incentive (PLI) scheme for the sector.

DoT said in a release that the scheme would take effect from April 1, 2021. Interested, eligible applicants could register for the scheme from June 4. The application window will be open for 30 days till July 3.

“With the objective to boost domestic manufacturing, investments and export in the telecom and networking products, DoT notified the PLI Scheme on February 24, 2021. Now, after extensive consultations with stakeholders, the operational guidelines for the scheme have been issued,” the statement said.

Applicants would have to meet the minimum revenue criteria. The company may decide to invest either in single or multiple eligible products. “The scheme stipulates a minimum investment threshold of ₹10 crore for MSMEs and ₹100 crore for non-MSME applicants,” the DoT said. “Land and building costs will not be counted as investment. Eligibility shall be further subject to incremental sales of manufactured goods,” it added. DoT would grant approvals to 10 eligible applications each in the MSME and non-MSME categories. Out of the 10 applications in the non-MSME category, at least three would be eligible domestic companies.

The government expects that full utilisation of the scheme funds was likely to lead to incremental production of about ₹2.4 lakh crore with exports of about ₹2 lakh crore over five years. “It is also expected that the scheme will bring investment of about ₹3,000 crore and generate huge direct and indirect employment,” it said.

Kunal Chaudhary, Partner, EY India said, “With qualification criterion of a global manufacturing turnover of ₹250 crore and ₹10,000 crore for domestic and global companies respectively, and 15% weightage to R&D expense and incentive to be given only to a maximum of 10 non-MSME companies, it would be interesting to see how the industry works to meet these criteria.”

“With the 5G revolution set to kickstart in India, we will require new investments, software and hardware development. The PLI scheme will complement the 5G ecosystem,” said Sandeep Aggarwal, chairman, Telecom Equipment and Services Export Promotion Council. “By the time we see an increment in demand, the telecom manufacturing sector will be ready with new products and innovations,” he added.

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