The Narendra Modi government on Monday, October 31, has given its go-ahead to 42 companies, including 28 MSMEs, under the production linked incentive (PLI) scheme for telecom and networking products. Of them, 17 companies have applied for the additional incentives of 1 percent under the design-led manufacturing criteria.

These 42 companies have committed investments of Rs 4,115 crore. This is expected to generate additional sales of Rs 2.45 lakh crore and create 44,000 more jobs over the scheme period.

The existing companies under the PLI scheme for telecom and networking products were allowed to add more products and apply under the design-led PLI scheme. They were also given the benefit of shifting their five-year PLI scheme period by one year.

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Twenty two companies availed this opportunity of shifting their first year, which includes 13 fresh applicants.

What is design linked incentive scheme?

With the objective to build a strong ecosystem for 5G, the Union Budget 2022-23 has proposed to launch a scheme for design-led manufacturing as part of the existing PLI scheme.

Further, the Department of Telecom launched an incentive scheme for design-led manufacturers and extended the duration of the Rs 12,195-crore PLI scheme by a year.

The incentive for design-led manufacturing is part of the PLI scheme, which was notified on February 24, 2021. The DoT has amended the clause and made the scheme effective from April 1, 2022.

Who are eligible?

Telecom equipment makers who use 50 percent of Made in India components in their products will be eligible for the design-linked incentive. The new version of telecom PLI heeded the demand of domestic manufacturers by removing the 15 percent cap on investment in research and development.

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The PLI scheme can provide incentives in the range of 4-7 percent. The design-led manufacturers will get a 1 percent additional incentive over existing slabs under the PLI scheme.

(Edited by : Shoma Bhattacharjee)