India to disburse over Rs 400 crore in incentives this FY to Nokia, Jabil & 18 others under PLI scheme for telecom gears

The Department of Telecommunications (DoT) is likely to disburse over Rs 400 crore in incentives in the current fiscal to 20 companies, including Nokia, Jabil, VVDN and HFCL, that have met targets under the production-linked incentive (PLI) scheme for manufacturing of telecom gear.

“The incentives will be given for achieving targets of FY22-23 and 20 companies have been shortlisted for the sops,” a DoT official told ET.

Another official said while this is the second year of the scheme, many companies will be getting incentives for the first time as they have chosen to participate in the amended scheme and increased investments too.


Originally, the DoT had notified the PLI scheme for telecom and networking products in February 2021 with an outlay of Rs 12,195 crore. A total 31 companies were given approval on October 14, 2021 for the scheme.

The scheme offers incentives in the range of 4% to 7% for different categories and years. For MSMEs, a 1% higher incentive is proposed in year 1, year 2 and year 3.

The scheme was amended in April last year to facilitate design-led manufacturing with an additional incentive rate of 1% over and above existing incentive rates.

A sum of Rs 4,000 crore from the Rs 12,195 crore was set aside for it. The scheme was extended by a year as most selected companies failed to achieve the production targets due to Covid-related supply chain disruptions.

In the revised scheme, 42 companies were selected, including 28 medium and small enterprises (MSMEs), that committed total investments of Rs 4,115 crore. The existing companies under the PLI scheme were allowed to add more products and apply under design-led PLI scheme.

They were also given the benefit of shifting their five-year PLI scheme period by one year. Twenty-two companies had availed of this opportunity of shifting their first year.

The government is also in regular touch with telecom equipment makers as this is a key target area. The products manufactured under the PLI scheme are exported to many countries.

To boost manufacturing of telecom equipment, the government had tightened rules around custom duty payments by gear importers in a bid to plug leakages. The move has helped local manufacturing of routers, modems and set top boxes amongst others.

Further, the government has allowed companies to claim benefits for making 5G fixed wireless access (FWA) equipment. Leading telcos Reliance Jio and Bharti Airtel are betting on FWA to monetise 5G and all products are made locally.