The PLI scheme has really impacted India’s telecom and electronics manufacturing industries. It was created to boost local production and reduce dependence on imports. Since its launch, it has delivered impressive results in a short time.

Over the past three years, India’s production-linked incentive (PLI) scheme for the telecom sector has been a gamechanger. It has attracted investments worth ₹3,400 crore, resulting in a significant increase in domestic telecom equipment production, worth over ₹50,000 crore. This surge has not only met local demand but also boosted exports, which have grown to around ₹10,500 crore.

Importantly, this growth has created over 17,800 direct jobs and many indirect employment opportunities, boosting economic activity. In addition, India has reduced its import dependence by 60%, achieving near self-sufficiency in critical areas such as antennas, GPON and CPE, thereby enhancing its technological independence and flexibility in the telecom sector.

What is the PLI scheme for electronics manufacturing?

The Production Linked Incentive (PLI) scheme for large-scale electronic manufacturing, focusing on mobile phones and their components, aims to support India’s goal of self-reliance (Aatmanirbhar Bharat) and promote telecom equipment production. Under the scheme, the government provides financial assistance based on the increase in sales of products made in India.

Government data shows a change in India’s mobile phone manufacturing landscape: in 2014-15, India produced 58 million units while importing 210 million units. By 2023-24, India’s domestic production reached 330 million units, while imports fell dramatically to just three million units. During this period, India also became a significant exporter, exporting close to 50 million units.

This surge in domestic production and exports has significantly reduced the telecom sector’s trade deficit, which has come down from ₹68,000 crore to ₹4,000 crore over the last five years. The PLI scheme has thus strengthened India’s capabilities in mobile phone manufacturing and contributed to its goal of becoming a global hub for telecom equipment production.

Main idea

• Sales of companies benefiting from the production-linked incentive (PLI) scheme in the telecom equipment manufacturing sector have exceeded Rs 50,000 crore. Sales of telecom and networking products by these companies in FY 2023-24 have grown by 370% compared to FY 2019-20.

• This growth has created over 17,800 direct jobs and numerous indirect jobs in manufacturing, research and development.

• By promoting local production, the PLI scheme has reduced India’s dependence on imported telecom equipment by 60%. India is now almost self-sufficient in the production of items such as antennas, GPON and CPE. This reduces dependence on imports, enhances national security and promotes self-reliance.

Indian manufacturers are becoming increasingly competitive globally and are providing high quality products at competitive prices.

Recent progress in the PLI scheme

The Indian government has reopened the application period for the production-linked incentive (PLI) scheme for white goods, with a focus on air conditioners (ACs) and LED lights. Companies can apply between July 15 and October 12, with both new companies and those that have been part of the scheme eligible to apply. Existing companies that want to invest more or change product categories can also apply, provided they meet specific conditions mentioned in the scheme guidelines available online.

Approved applicants will get incentives for the remaining period of the scheme, while new applicants and those who invest more will get incentives for three years. Claims will now be processed on a quarterly basis instead of annually, helping in better financial management for companies, and the guidelines will be updated accordingly. So far, 66 companies have invested ₹6,962 crore for the scheme, with firms such as Daikin, Voltas, LG, Blue Star and Dixon investing in making parts for ACs and LED lights, helping manufacture components that were not previously made in India.

Final Words

The Indian government’s PLI scheme and other initiatives have helped reduce the gap between India’s imports and exports in telecom products. Now, the total value of telecom equipment and mobiles exported from India is over ₹1.49 lakh crore. This is slightly higher than the imports of ₹1.53 lakh crore. This shows that India is moving towards exporting more than importing in this sector, making our telecom and electronics manufacturing industry more competitive globally.