Production Linked Incentives Schemes for Telecom Sector of India

PLI Scheme for Telecom

Overview

India is the 2^nd largest telecom market in the world with 765.1 million broadband subscribers. The telecom sector provides direct and indirect employment to 4 million people in India and constitutes 7% of all FDI inflows in the country. To attract large-scale investments in telecom equipment manufacturing and augment the domestic production capacity, the Government of India has introduced the Production Linked Incentive Scheme for Telecom and Networking products.

The Production Linked Incentive (PLI) Scheme provides a financial incentive to boost domestic manufacturing and attract investments in the target segments of Telecom and Networking Products. It is estimated that full utilisation of the Scheme funds is likely to lead to incremental production of around ₹ 2.4 lakh crores with exports of around ₹ 2 lakh crores over 5 years. It is also expected that the Scheme will bring in investments of around ₹ 3,000 crores and generate huge direct and indirect employment. This is in line with the larger objective of Make in India.

Scheme 1

Production Linked Incentives for Telecom and Networking Products

Overview

The Production Linked Incentive (PLI) Scheme will promote Telecom and Networking Products manufacturing in India. Accordingly, a financial incentive is proposed to boost domestic manufacturing and attract investments in the target segments of telecom and networking products in order to encourage 'Make in India'.

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Guidelines

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Last Date for Application: 3 July 2021

Highlights

Incentive

Incentive of 7% to 4% on incremental sales (over base year) of goods manufactured in India
Target Segments

Telecom and Networking Equipment
Eligibility

Eligibility shall be subject to thresholds of incremental investment and incremental sales of manufactured goods
Tenure

Support under the scheme shall be provided for a period of five (5) years from 1.04.2021

Target Segments

Core Transmission Equipment
- Dense Wavelength Division Multiplexing (DWDM), Optical Transport Network (OTN), Multi Service Provisioning Platform (MSPP), Synchronous Digital Hierarchy (SDH), Packet Transport Network (PTN)/ Multi-Protocol Label Switching (MPLS), Gigabit Passive Optical Networks, (GPON)/ Next Generation- Passive Optical Network (NG-PON) Optical Line Terminal (OLT), Digital Microwave Radio
4G/5G, Next Generation Radio Access Network and Wireless Equipment
- 4G/ Long Term Evolution (LTE)Radio Access Network (RAN) Base Station & Core Equipment; 5G RAN Base Station & Core Equipment; Edge and Enterprise Equipment; Wireless, Telecommunication Equipment in Access and Backhaul
Access and Customer Premises Equipment (CPE), Internet of Things (IoT) Access Devices, and Other Wireless Equipment
- Unified Communications Platforms, IP Multimedia Subsystem, Soft Switch, GPON Optical Network Terminal (ONT), Wireless Fidelity (Wi-Fi) Access Point and Controller, LTE CPE, 5G,CPE, Short Range Devices and Associated Electronics in new technologies like 4G/5G/Fibre to the Home (FTTH) etc.
Enterprise equipment: Switches, Routers
- Switches, Routers, Internet protocol (IP) and Packet Switching and Routing Apparatus
Any Other Product: As decided by the EGoS

Eligibility

Year	Proposed Incentive Rate on Incremental Sales	Cumulative Investment (other than land and building)	Minimum Eligible Incremental Net Sales# of Manufactured Goods over the Base Year	Maximum Eligible Incremental Net Sales# of Manufactured Goods over the Base Year
MSMEs - Minimum Threshold of Investment ₹ 10 Crores
1	7%	Greater than or equal to 20% of X	3*(20% of X)	20*(20% of X)
2	7%	Greater than or equal to 40% of X	3*(40% of X)	20*(40% of X)
3	6%	Greater than or equal to 70% of X	3*(70% of X)	20*(70% of X)
4	5%	Greater than or equal to X	3*X
5	4%		3*X
Other than MSMEs - Minimum Threshold of Investment ₹ 100 Crores
1	6%	Greater than or equal to 20% of X	3*(20% of X)	20*(20% of X)
2	6%	Greater than or equal to 40% of X	3*(20% of X)	20*(40% of X)
3	5%	Greater than or equal to 70% of X	3*(20% of X)	20*(70% of X)
4	5%	Greater than or equal to X	3*X	20*X
5	4%		3*X	20*X
Where X = Committed Total Investment by the Company / entity over a period of four years starting from the year 2021-22 (minimum ₹ 10 Crores for MSMEs and ₹ 100 Crores for others)
MSMEs = Micro, Small and Medium Enterprises as defined by the Government of India
#As defined under Clause 2.2 of the Scheme Guidelines

Process Flow

Step One

Application Process

Registration on Scheme Portal - Applicant
- Approval Email will be sent by PMA within 2 working days from registration.
Submission of Application - Applicant
- An acknowledgement Email will be sent to the applicant by the PMA post submission.
Application Scrutiny and Appraisal - Project Management Agency (PMA)
- To be completed within 15 working days from the last date of Application submission.
Intimation of Deficiencies in the application (if any) - PMA
- Deficiencies in the application to be rectified by the applicant within 15 working days from intimation.
Final Recommendation to DoT - PMA
- Within 10 working days from the last date of rectification in deficiencies.
Application Approval (based on decision of Competent Authority/DoT) - PMA
- Letter of approval to be issued within 7 working days from date of receipt of approval by the Competent Authority.

Step Two

Disbursement Process

Submission of Claim for Disbursement of Incentive - Applicant
Verification of Eligibility and Assessment of Incentive - PMA
Approval of Disbursement Claim (based on the decision of Competent Authority and DoT) - PMA
Disbursement of Funds - PMA