Dept of Telecom plans to review public procurement policy for telecom products

The Department of Telecommunications (DoT) plans to review India’s Public Procurement (Preference to Make in India), or PPP-MII, policy to attract more manufacturers of electronics and telecom products to the country. The country’s limited component ecosystem poses challenges in achieving the 50–60% local content prescribed for such products under the PPP-MII policy, thereby disqualifying several potential players, the DoT states, citing multiple reports.

In a notice inviting stakeholder comments on June 3, the DoT said the review will cover specific aspects of the policy, such as the list of products, product-wise local content requirements — including the ceiling on local content for design — conditions under which inputs (including design) qualify as local content, and the criteria for calculating local content for software products.

Under the current PPP-MII policy, any firm seeking preference in government telecom tenders must meet a minimum 50% local content threshold. To qualify as a “Class-I” supplier — and thus enjoy pricing and selection advantages — firms must demonstrate that at least 50% of a product’s value is sourced or manufactured in India. Companies under India’s Production Linked Incentive (PLI) scheme can qualify as “Class-II” suppliers with a 20% local content threshold, though they receive preference only if Class-I suppliers cannot meet demand. The policy applies to 36 key telecom product categories — including routers, Ethernet switches, GPON devices, media gateways, customer premises equipment (CPE), satellite terminals, telecom batteries, and optical fibre and cables.

“The dilution of the PPP-MII policy will benefit foreign multinational corporations like Cisco, Ericsson, and Nokia, as they currently fail to meet the 50% local content threshold. If dilution happens to the Order, these companies would gain easier access to government contracts without manufacturing in India, potentially displacing Indian firms like Tejas Networks, HFCL, and C-DOT that have invested in Indian R&D, intellectual property (IP), and manufacturing,” says Ajay Srivastava, founder of the Delhi-based think tank Global Trade Research Initiative (GTRI). “Diluting local content rules will turn India into a low-value assembly hub, discourage IP creation, and increase reliance on foreign-controlled telecom technologies — undermining the very goals of Make in India and digital sovereignty,” he adds.

The DoT notice has been sent to all stakeholders — public, private, Indian, and foreign — requesting their comments and suggestions on the PPP-MII review plan. “Any recommendations for the inclusion of new products or exclusion of existing ones must be substantiated with detailed justification, including verifiable data such as the list of major manufacturers, estimated local content value (%), annual production capacity, domestic sales and exports/imports, sales to public sector entities, etc.,” the notice states.

The one-month period for accepting stakeholder responses ends in July.