India prepares to launch a successor to its telecom production-linked incentive scheme, aiming to boost local component manufacturing, reduce import reliance, and sustain the sector’s strategic growth amidst record investments and job creation.
India is preparing to extend its support for telecom manufacturing with a successor to the production-linked incentive scheme, as it looks to deepen domestic production of network equipment and raise local value addition. According to reporting from Moneycontrol, the next phase is being designed with a larger budget and a sharper focus on building a homegrown components ecosystem, rather than relying mainly on final assembly.
The move comes as officials assess the first scheme’s performance and consider how to sustain momentum in a sector that has become strategically important to India’s digital infrastructure. The Department of Telecommunications has said the existing telecom and networking products incentive programme has drawn more than ₹5,200 crore of investment, generated about ₹1.1 lakh crore in cumulative sales and supported exports of over ₹23,500 crore. It has also helped create 32,500 jobs and led to the establishment of 100 5G use-case labs, according to Moneycontrol’s report.
Industry estimates suggest the broader production-linked incentive framework has already become a significant industrial policy tool. Mint reported that across 14 sectors, the scheme has attracted investments of more than ₹2.16 trillion and produced sales exceeding ₹20.41 trillion, underscoring the government’s bet that targeted incentives can pull in capital, lift output and improve India’s competitiveness in manufacturing. Telecom has been one of the areas where that strategy has been most visible.
The telecom programme itself was originally designed to strengthen a domestic supply chain for equipment such as 4G and 5G radio access networks, enterprise switches, routers, customer premises gear, optical transmission systems and satellite communication components, according to a policy note from VisionIAS summarising the scheme. India Briefing reported that the rules were later expanded to include design-led manufacturing of 5G products, and that companies including Samsung, Cisco, Jabil, Flex, Foxconn, Nokia and Ericsson were among the applicants.
The next version of the scheme would aim to push that effort further by encouraging more components to be made locally, a shift that could reduce dependence on imports and raise the share of domestic value in finished products. That broader industrial push also fits with the government’s wider messaging on telecom, with Communications Minister Jyotiraditya Scindia saying earlier this year that officials were examining the next phase of the incentive plan while maintaining support for the sector’s expansion.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
