Production-Linked Incentive(PLI) scheme for the telecom sector – UPSC Prelims

  • Aim of the scheme: It will make India a global hub for manufacturing telecom equipment. Moreover, it will create jobs and reduce imports especially from China.
  • Focus of the scheme: The scheme will offset the huge import of telecom equipment worth more than Rs 50,000 crore. By that, it will encourage the foreign manufacturers and domestic manufacturers to set up production units in India.
  • Coverage: The scheme will cover domestic manufacturing of equipment such as
    • core transmission equipment,
    • 4G/5G and next-generation radio access network and wireless equipment,
    • Internet of Things (IoT) access devices,
    • enterprise equipment such as switches and routers
  • Duration of the Scheme: The scheme will be operational from April 1 and will run for the next five years.
  • Eligibility: The eligibility for the scheme will be subject to:
    • Achieving a minimum threshold of cumulative investment
    • incremental sales of manufactured goods, with 2019-20 as the base year.
  • Incentives: For the inclusion of MSMEs in the scheme, the minimum investment threshold has been kept at ₹10 crores while for others it is ₹100 crore. Further, for MSMEs, It proposes a 1% higher incentive in the first three years.
Significance of the scheme:
  • The scheme may lead to an incremental production of about ₹2.4 lakh crore with exports of about ₹2 lakh crore over five years. Moreover, it may bring in investments of more than ₹3,000 crores.
  • With the inclusion of telecom equipment manufacturing under the ambit of PLI schemes, the total number of sectors under such programmes stands at 13.
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