Samsung and Ericsson ignore PLI telecommunications program; 37 global and local vendors including Nokia, Cisco, Flex, Foxconn, apply, Telecom News, ET Telecom

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NEW DELHI: Thirty-seven global and local equipment suppliers and subcontractors, including Nokia, Cisco, Flex, Foxconn and Jabil, have applied for the Production Incentive Program (PLI) for the manufacturing of telecommunications and network.

Korean Samsung Electronics has decided not to apply for the program due to the high investment required at a time when the company has an FTA through which it continues to import equipment for its sole customer, Reliance Jio.

Swedish equipment seller Ericsson also decided not to apply for the program. Its contract manufacturing partner Jabil has applied for the program. Jabil manufactures telecommunications equipment for Ericsson in Pune.

Local companies like Tejas Networks, Coral Telecom, HFCL and Dixon Technologies also applied for the program.

The Telecommunications Department (DoT) will now select companies from among the 37 applicants on the basis of competitive investments, meaning companies that invest more will have a better chance of being selected.

Last month, the DoT released detailed guidelines while opening applications for manufacturers of telecommunications equipment and network products to apply for the PLI program.

As part of the plan, 10 major manufacturers and 10 MSMEs will be selected to receive incentives worth Rs 12,195 crore over a five-year period upon reaching the stipulated production targets. Of this amount, Rs 1,000 crore has been set aside for the 10 MSMEs, three of which will be national companies.

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

European telecommunications equipment suppliers Ericsson and Nokia have told the government that tariffs imposed on components of telecommunications equipment will impact the profitability of local manufacturing at a time when a similar tax on finished goods does not exist. ‘has not been increased accordingly. The Indian government recently increased tariffs from zero to 10-20% on various components including PCBA, base station controller, system module and cables, among others, which go into the manufacture of telecommunications equipment. There is also a 10% surcharge applicable on customs duties.

These components are not available locally in India and suppliers must import them from global sources. They recently told the DoT that the tariff change resulted in an overall increase of 5-6% in the local manufacturing cost of radios, baseband and microwaves.


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