Telecom gear makers fear missing out on PLI

Cisco, Ciena, Samsung, Foxconn, Flex, Nokia and Ericsson, which want to finalise their local manufacturing plans under the telecom equipment production-linked incentive (PLI) scheme, fear they will lose out on four months while waiting for approvals and the detailed guidelines.The scheme became effective on April 1 but the companies don’t expect the approval letters to come in before July, with the entire process of selection and disbursement of final clearances likely to take time, executives at three of the companies said.However, a senior Department of Telecommunications official told ET the basic incentive structure and names of interested companies have already been announced.“The guidelines are also in the final stages and will be released shortly. The workings of the department had been halted in the past weeks due to the severe Covid spread,” the official said.The official did not comment on the concerns of companies over missing out on production targets.“The final guidelines are important for us to understand the business case and make a production commitment,” one executive said. “We believe production will not start for another quarter given the poor state of manufacturing operations across sectors.”Samsung, Foxconn, Flex, Nokia and Ericsson did not respond to queries while the others could not be reached immediately for comment.DoT announced the PLI for local manufacture of telecom equipment and network hardware in February, with ₹12,195 crore to be disbursed over five years and incentives ranging from 4% to 6% of incremental production in a year. The scheme offers a higher incentive of 4%-7% to MSMEs that must invest ₹10 crore, while large companies have an investment threshold of ₹100 crore.The scheme will cover products such as 4G/5G next-generation radio access networks, IoT devices, customer premises equipment, routers and switches.DoT said in April that Ericsson and Nokia were keen to expand their existing operations in India for global supply chains, while Samsung, Cisco, Ciena and engineering manufacturing service companies like Jabil USA, Foxconn Taiwan, Sanmina USA, and Flex USA have shown interest in setting up manufacturing units in India.Local companies HFCL, Coral Telecom, Sterlite, Dixon and VVDN Technologies plan to expand their facilities. Bharti Enterprises said separately it is forming a JV with Dixon to make telecom equipment.

from Economic Times https://ift.tt/3vB8zFh