DoT announces changes to telecom PLI scheme: Key changes, scheme eligibility and more

The Department of Telecom (DoT) has announced an incentive scheme for design-driven manufacturing, along with a one-year extension to the duration of a manufacturing incentive scheme (PLI) for telecom network products. The Point had warned PLIE Settlement on February 24, 2021, with a financial outlay of Rs 12,195 crore. The DoT has amended the clause and made the arrangement effective April 1, 2022.
Why the change?
“After consultation with stakeholders, the guidelines for the PLI scheme for telecom and network products have been changed to introduce the Design-led Manufacturing with additional incentive rates,” DoT said in a statement.
What are the main changes?
* The new scheme has increased the incentive rate by a further 1%.
* Based on stakeholder feedback, DoT says it has decided to extend the existing PLI scheme for another year. The existing PLI beneficiaries will have the option to choose fiscal year 2021-22 or fiscal year 2022-23 as the first year of the incentive.
* The new version of the telecom PLI scheme also removes the 15% requirement for investment in research and development.
* DoT has also approved 11 new telecom and network products to the existing list that can be manufactured under the scheme.
* The incentives will be given from the Rs 4,000 crore left over from the total expenditure.
Who is eligible for the scheme?
Telecom equipment manufacturers that use 50% of the Made in India components in their product are eligible for the design-linked incentive. The scheme sets a minimum investment threshold of Rs 10 crore for SMEs and Rs 100 crore for non-SME applicants. Land and construction costs are not included as an investment under the scheme. The allocation for MSME has been increased from Rs 1,000 crore to Rs 2,500 crore. DoT also said that design-driven manufacturing applications will take precedence over other manufacturers during the shortlist.
When can companies apply
The application window is open from June 21 to July 20. Applicants can take advantage of incentives for 5 years starting from April 1, 2022 through FY 2025-26.
What is the eligible investment category under the PLI scheme for telecom and network products?
Investments under the PLI scheme for telecom and network products can be made in the target segments of the scheme, capitalized in the applicants’ accounts under the following categories:
a plant, Machinery, Equipment and associated utilities.
b) Research and development.
c) Transfer of Technology (ToT) Agreements.

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