Saturday, 10 April 2021

India backs $1.68bn in incentives for domestic telecoms equipment production

by Harry Baldock, Total Telecom
Wednesday 17 February 21

The plan is part of a wider strategy from Prime Minister Narendra Modi to wean the country off of tech imports, especially from China

Today, India’s federal government has approved a $1.68 billion fund to help promote domestic telecoms equipment manufacturing.  The fund will be available to equipment makers in the form of incentives between 4% and 7% on any increase in sales of locally made equipment over the next five years, compared to 2019/20 levels. “I would appeal to all telecoms&rsquo…

Today, India’s federal government has approved a $1.68 billion fund to help promote domestic telecoms equipment manufacturing. 

The fund will be available to equipment makers in the form of incentives between 4% and 7% on any increase in sales of locally made equipment over the next five years, compared to 2019/20 levels.

“I would appeal to all telecoms’ equipment manufacturers, come on India is waiting for you with this scheme, we’ll give you all the help,” said India’s telecoms minister Ravi Shankar Prasad at a news conference.

This is not the first time India has offered industry incentives to try and boost domestic production. Last year saw the government launch a $6.65 billion incentive plan for the smartphone manufacturing industry. This move is already bearing fruit; for example, three of Apples primarily manufacturers, Foxconn, Wistron, and Pegatron, has announced plans to invest a combined $900 million into the Indian industry over the next five years. 

Prasad is hopeful that a similar scheme for the telecoms equipment market will show similar results.

The government’s drive to turn India into a technology hub is a complex long term strategy, intrinsically linked to the increasing digitalisation of the country and the elevation of its market on the world stage. Equally, however, it is central to reducing the country’s reliance on neighbouring China, with whom technological tensions have been growing, not least due to border clashes last year.

This focus on home-grown technology will seemingly extend to 5G. Earlier this year, Prasad himself urged the nation’s operators to make greater use of Indian technology, arguing that “the core of the network should be Indian”. He said that India had lagged behind in previous generations of mobile technology, but that 5G could be the turning point.

However, while much of the world is already rolling out 5G services, the India market is somewhat stalled by the lack of available spectrum. The operators have said they are ready to begin services, but the 5G spectrum auction has faced numerous delays, now scheduled nebulously for some time in the second half of 2021.

For Reliance Jio, however, the prospect of an increased focus on domestic telecoms equipment production is likely music to their ears. The disruptive operator announced in March last year that it was developing its own in-house 5G technology, saying in July that it was already ready to test the equipment as soon as spectrum became available. In the long term, Jio has spoken of selling its 5G solutions to the international market.

 

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