DoT may shortlist gear vendors based on competitive investment for telecom PLI scheme: ReportNEW DELHI: To spur competition in the telecom equipment manufacturing industry, the Department of Telecommunications (DoT) has framed the telecom PLI guidelines in such a way that equipment makers committing higher investments would have higher chances of being shortlisted for receiving incentives, according to a Financial Express report.

This also means that the highest bidding companies might get selected while other companies may be left out of the scope of the telecom PLI scheme.

European telecom gear vendors like Ericsson and Nokia are keen to expand their existing operation in India for the global supply chain under the scheme, while other global vendors like Samsung, Cisco, Ciena, and Engineering Manufacturing Services (EMS) companies like Jabil, Foxconn, Sanmina and Flex too have shown interest in establishing their manufacturing base in India for telecom and networking products for domestic and international markets.

According to draft guidelines, these companies would need to commit higher investments than the base threshold limit.

For those unaware, the minimum investment amount has been kept at Rs 10 crore for micro, small and medium enterprises (MSMEs) and Rs 100 crore for others, while the total outlay of the scheme is Rs 12,195 crore over five years.

According to estimates, the scheme is expected to bring an investment of over Rs 3,000 crore and generate tax revenue of about Rs 17,000 crore.

But there is a catch: the DoT is now planning to shortlist a total of 20 companies under the scheme–10 from MSMEs industry and 10 companies from the general pool, which is likely to comprise Nokia, Ericsson, among others, according to the draft guidelines.

The draft guidelines are said to be finalised and announced later this week basis feedback received from the commerce ministry, department for the promotion of industry and internal trade (DPIIT), and Niti Aayog.

However, the report highlighted that it is likely that non-MSME companies may attempt to gain an upper hand over others by committing higher investment amounts over the base amount of Rs 100 crore, and this may exhaust the earmarked amount resulting in only a couple of companies being eligible for incentives.

The government, though, has not laid down such criteria for MSME companies, anticipating that they would not invest higher than the base amount of Rs 10 crore.

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