Nokia and Ericsson want India to include their existing manufacturing-related investments under the PLI scheme. This comes after the announcement of the PLI scheme for networking products. It is being expected that the Scheme would incentivize and support the exports from India. This is similar to the PLI scheme for the mobile handset industry.
“…cost levels in India productions are little higher than higher than other countries so I really welcome this kind of a policy which is coming up to provide incentives for local manufacturers because that really helps the Indian economy,” said Sanjay Malik, Senior VP & Head, India Market, Nokia to ET.
According to the European telecom gear vendors, India should focus on bringing the component system under the new scheme. This aims at giving approximately Rs 12,2000 crore sops.
“…the whole policy framework is known at a very high level and details are not yet known and we are also awaiting those details…but there’s only one appeal from my side that it [scheme] should be looking at providing these incentives for future investment as well as for the past investment,” Malik added.
Ericsson also shares a similar view like Nokia. “Investments that are already made should also be considered in some way under the PLI scheme”, says Nitin Bansal, Ericsson’s India Head.
According to both the companies, the scheme will give a strong boost to India’s telecom equipment manufacturing industry. They have also committed to Bharti Airtel – their largest client, that all the 5G equipment will be locally manufactured for the Sunil Mittal-led telco.
Ericsson’s production in its manufacturing facility in Pune’s factory caters to India’s domestic demand. It also gets exported to Southeast Asian countries. Approximately 95 per cent of the Airtel’s and Vodafone Idea’s radio was supplied from this facility.
Whereas, Nokia’s manufacturing facility in Chennai exports 5G products and older-gen products to mature markets like the Asia Pacific, Europe, and the US. The facility is now ramping up 5G exports from the factory. Along with that, it is also evaluating optics and transport gear manufacturing, after investing Rs 600 crore towards the factory (till date).
According to Malik, Nokia has the largest manufacturing setup in India from the telecom vendor perspective. “…the government has to take some initiatives to attract the component manufacturing ecosystem into India”, he added.
“We want to deliver everything for Indian telcos’ needs from India. PLI would be a catalyst in our decision making to make different equipment for India and other markets,’ Bansal added. He urged the Indian government to find ways to bring in the component ecosystem under the scheme. This will not just support the core telecom sector but also areas like industry 4.0 and IoT.