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06-17 18:38

Telecom gear makers fear missing out on PLI targetsNew Delhi: Cisco, Ciena, Samsung, Foxconn, Flex, Nokia and Ericsson, which want to finalise their local manufacturing plans under the telecom equipment production-linked incentive (PLI) scheme, fear they will lose out on four months while waiting for approvals and the detailed guidelines.

The scheme became effective on April 1 but the companies don¨t expect the approval letters to come in before July, with the entire process of selection and disbursement of final clearances likely to take time, executives at three of the companies said.

However, a senior Department of Telecommunications official told ET the basic incentive structure and names of interested companies have already been announced.

^The guidelines are also in the final stages and will be released shortly. The workings of the department had been halted in the past weeks due to the severe Covid spread, ̄ the official said.

The official did not comment on the concerns of companies over missing out on production targets.

^The final guidelines are important for us to understand the business case and make a production commitment, ̄ one executive said. ^We believe production will not start for another quarter given the poor state of manufacturing operations across sectors. ̄

Samsung, Foxconn, Flex, Nokia and Ericsson did not respond to ET¨s queries while the other companies could not be reached immediately for comment.

DoT announced the PLI for local manufacture of telecom equipment and network hardware in February, with Rs 12,195 crore to be disbursed over five years and incentives ranging from 4% to 6% of incremental production in a year. The scheme offers a higher incentive of 4%-7% to micro, small and medium enterprises that must invest Rs 10 crore, while large companies have an investment threshold of Rs 100 crore.

The scheme will cover products such as 4G/5G next-generation radio access networks, IoT devices, customer premises equipment, routers and switches.

DoT to start inviting applications for telecom PLI scheme shortly; Huawei, ZTE shut out: CNBC-AwaazHow the PLI Scheme for telecom is a key factor for Digital India

DoT said in April that Ericsson and Nokia were keen to expand their existing operations in India for global supply chains, while Samsung, Cisco, Ciena and engineering manufacturing service companies like Jabil USA, Foxconn Taiwan, Sanmina USA, and Flex USA have shown interest in setting up manufacturing units in India.

Local companies HFCL, Coral Telecom, Sterlite, Dixon and VVDN Technologies plan to expand their facilities. Bharti Enterprises said separately it is forming a joint venture with Dixon to make telecom equipment and avail of the benefits of the scheme.

Experts said incumbents will be at a disadvantage because newcomers will start from zero and any amount of their production will be counted as incremental.

The government expects the scheme to attract investments of more than Rs 3,000 crore, generate incremental production of Rs 2.4 lakh crore, with exports of about Rs 2 lakh crore over five years.