Network vendors urge DoT for production-linked incentive policy

Kolkata | New Delhi: Global network vendors such as Huawei, Ericsson and Nokia have urged the telecom department to unveil a production-linked incentive (PLI) policy that fully offsets the 8-10% local manufacturing cost disadvantage that vendors currently face, vis-a-vis Vietnam, Thailand, the Philippines and China. This, they said, is critical for boosting local production and transforming India into a global telecom gear manufacturing hub.

“Global vendors have also recommended that such a PLI should factor in a network vendor’s R&D costs—a significant chunk of local manufacturing costs—and be linked to incremental equipment production catering to both domestic and export markets,” a top executive of a leading global networks gear maker told ET.


The suggestions were made at a top-level meeting of the Department of Telecommunications (DoT) Wednesday that was attended by senior executives representing local and global network vendors and mobile carriers.

Network vendors and telcos also urged DoT not to ape the just-announced PLI policy for mobile phones as network gear manufacturing is primarily a business-to-business (B2B) scenario with customers limited to just the four major telcos-—Reliance Jio, Bharti Airtel, Vodafone Idea and BSNL—unlike the handset industry where there are over a billion customers.

In fact, they pitched for a separate PLI scheme for network equipment makers, given the virtual absence of a robust local components ecosystem. Network vendors urge DoT for PLI policyNetwork vendors urge DoT for PLI policy.


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