Samsung requests PLI to manufacture 4G and 5G equipment locally

Samsung has reapplied for the Rs 12,195 crore telecom equipment production-linked incentive (PLI) scheme despite skipping it last year due to a lack of chances in the equipment supply market since Reliance Jio was its sole 4G subscriber and 5G rollouts were not anticipated until 2021- in an effort to take advantage of the national initiative to manufacture 4G and 5G equipment locally for both domestic and international sales.

Samsung does not currently produce telecom equipment in the nation, but once chosen under the PLI programme, it will begin making the equipment locally, according to telecom department officials. Samsung would then apply for the PLI programme, which aims to increase domestic production of telecom equipment and decrease imports, alongside other international manufacturers including Cisco, Jabil, Flex, and Foxconn, as well as European telecom equipment suppliers Nokia and Ericsson.

However, circumstances have altered. Telecom companies are now preparing to roll out 5G services beginning next month after the 5G spectrum auctions were completed earlier this month. Bharti Airtel has given Samsung a contract to supply 5G equipment, and it is anticipated that it would also receive contracts from Reliance Jio and Vodafone Idea.

Receiving approval is a need in order to be chosen by telecom carriers to place equipment on their network. The order requiring operators to only purchase equipment from reputable suppliers went into effect on June 15, 2021, and it includes a requirement for security clearance following which Samsung was recognised as a “reliable” source earlier this year by the National Security Council Secretariat (NSCS).

Apart from the amendments to the scheme, however, the government has made it clear that businesses can only make claims for benefits for five years, not six. The first year of the incentive might either be FY2021–22 or FY202–23, which the enterprises can select.

The government predicted that, over the course of five years, the full utilisation of the scheme’s funding would likely result in incremental production of about Rs 2.4 lakh crore and exports of about Rs 2 lakh crore. The programme also has the possibility of attracting investment worth Rs 3,000 crore and creating a significant amount of direct and indirect employment.