PLI Schemes Boost India's Telecom and Electronics Manufacturing, Reduce Trade Deficit

Over the past five years, the trade deficit in telecom (both telecom equipment and mobiles) has reduced from Rs 68,000 crore to Rs 4,000 crore.

Aligning with Prime Minister Shri Narendra Modi's vision of making India 'Atmanirbhar', the Production Linked Incentive (PLI) Scheme for Telecom and Networking Products and for Large Scale Electronic Manufacturing of Electronics has led to significant increases in production, employment, economic growth, and exports in the country.

Within three years of the Telecom PLI scheme, it has attracted an investment of Rs 3,400 crore. Telecom equipment production has exceeded Rs 50,000 crore, with exports totaling approximately Rs 10,500 crore. This growth has created over 17,800 direct jobs and many more indirect jobs, showcasing the robust growth and competitiveness of India's telecom manufacturing industry. The PLI scheme aims to enhance domestic manufacturing capabilities and position India as a global hub for telecom equipment production by offering financial incentives to manufacturers based on incremental sales from products made in India.

The PLI Scheme for Large Scale Electronic Manufacturing covers the production of mobile phones and their components. This scheme has significantly boosted both the production and export of mobile phones from India. From being a large importer of mobile phones in 2014-15, with only 5.8 crore units produced domestically and 21 crore units imported, India produced 33 crore units in 2023-24, with only 0.3 crore units imported and close to 5 crore units exported. The value of mobile phone exports has surged from Rs 1,556 crore in 2014-15 to Rs 1,28,982 crore in 2023-24, while imports have dropped from Rs 48,609 crore in 2014-15 to Rs 7,665 crore in 2023-24.

Key highlights of the Telecom PLI scheme (excluding mobile phones) include:

Industry Growth: The telecom equipment manufacturing sector has seen exceptional growth, with sales exceeding Rs 50,000 crore by PLI companies. Sales of Telecom & Networking Products by PLI beneficiary companies in FY 2023-24 increased by 370% compared to the base year (FY 2019-20).

Job Creation: The initiative has generated substantial employment opportunities across the value chain, from manufacturing to research and development, creating over 17,800 direct jobs and many more indirect jobs.

Reduced Import Dependency: By promoting local production, the PLI scheme has significantly reduced the country's reliance on imported telecom equipment, achieving 60% import substitution. India has become almost self-reliant in Antennae, GPON (Gigabit Passive Optical Network), and CPE (Customer Premises Equipment), enhancing national security and fostering self-reliance.

Global Competitiveness: Indian manufacturers are increasingly competing on a global scale, offering high-quality products at competitive prices. Indian-made 5G telecom equipment is currently being exported to North America and Europe.

As a result of the PLI Scheme for Telecom and Networking Products and other related initiatives by the Department of Telecommunications (DoT) and the Ministry of Electronics and Information Technology (MeitY), the gap between telecom imports and exports has significantly narrowed. The total value of exported goods (including telecom equipment and mobiles) exceeded Rs 1.49 lakh crore against imports of over Rs 1.53 lakh crore in FY 2023-24.

Over the past five years, the trade deficit in telecom (both telecom equipment and mobiles) has reduced from Rs 68,000 crore to Rs 4,000 crore. The PLI Schemes have made Indian manufacturers globally competitive, attracted investment in core competency and cutting-edge technology, ensured efficiencies, created economies of scale, enhanced exports, and integrated India into the global value chain. This transformation has shifted India's export basket from traditional commodities to high value-added products.