The Department of Telecommunications (DoT) has extended the Production Linked Incentive (PLI) scheme by one year, based on the feedback from stakeholders. The extension will also apply to the already shortlisted telecom manufacturers selected for the scheme.

With this extension, the existing PLI beneficiaries can choose financial year 2021-22 or financial year 2022-23 as the first year of incentive. The telecom department has also approved the addition of 11 new telecom and networking products to the existing list, based on suggestions from the stakeholders.

The telecom department had notified the PLI scheme for the telecom sector on February 24, 2021, with a financial outlay of ₹12,195 crore. A total of 31 companies, comprising 16 MSMEs and 15 non-MSMEs, including 8 domestic and 7 global companies, were approved on October 14, 2021.

To build a strong 5G ecosystem, the Union Budget 2022-23 has proposed a scheme for design-led manufacturing as part of the existing telecom PLI scheme. After consultations with stakeholders, the guidelines for the PLI scheme for telecom and networking products was amended to introduce the design-led manufacturing with additional incentive rates.

To promote design-led manufacturing, DoT is inviting applications from design-led manufacturers as well as others, for availing incentive under the PLI scheme for five years commencing from April 1, 2022. Investment made by successful applicants in India from April 1, 2022 onwards and up to financial year 2025-26 shall be eligible, subject to qualifying incremental annual thresholds, says the Ministry of Communications.

The scheme is open to both MSME and non-MSME companies, including domestic and global players. The applications from design-led manufacturers shall be prioritised over other manufacturers during selection, the ministry further says.

“The design-led manufacturing is primarily aimed to support efforts for designing telecom products in India. It will recognise and encourage R&D-driven manufacturing in the country to enhance its contribution to the global value chain as envisaged in the National Digital Communication Policy, 2018,” it adds.

Applicants will have to satisfy the minimum global revenue criteria to be eligible for the scheme. The company may decide to invest for single or multiple eligible products. The scheme stipulates a minimum investment threshold of ₹10 crore for MSMEs and ₹100 crore for non-MSMEs.

Land and building cost will not be counted as investment, the government statement clarifies. Eligibility shall be further subject to incremental sales of manufactured goods over the base year, i.e. FY 2019-20.

The allocation for MSME has been enhanced from ₹1,000 crore to ₹2,500 crore.

Interested eligible applicants can register for the scheme from June 21, 2022 to July 20, 2022.These applications are invited for the balance fund of over ₹4,000 crore.

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