The government on Wednesday approved a production-linked incentive (PLI) scheme worth 12,195 crores for telecom gear manufacturing in India.

The move aims to position India as a global powerhouse for production of such equipment ahead of 5G roll-outs.

The PLI scheme for telecom gear manufacturing will be operational from April 1, 2021.

“The government is positioning India as a global powerhouse for manufacturing, and has created a conducive environment for ease of doing business. It will be implemented from April 1…Majority of the international players are keen to come to India and some of them already have their footprints in India. We are going to give them encouragement,” Ravi Shankar Prasad, Minister for Communications and IT said during a news briefing after the Cabinet meeting.

A government release said that the scheme will lead to incremental production of around Rs 2.4 lakh crores with exports of around Rs 2 lakh crores over five years. The scheme is expected to bring investment of over Rs 3,000 crore and generate huge direct and indirect employment and taxes both.

The scheme is expected to offset huge imports of telecom equipment worth more than Rs 50,000 crores and reinforce it with Made in India products both for domestic markets and exports, the release said.

The new scheme has an outlay of Rs 12,195 crores over five years, and its eligibility will be subject to achievement of a minimum threshold of cumulative incremental investment and incremental sales of manufactured goods.

There will be a minimum investment threshold of Rs.10 crore for MSME with incentives from 7 per cent to 4 per cent and Rs. 100 crore for others with incentives from 6 per cent to 4 per cent over 5 years above Base Year.

“Once qualified, the investor will be incentivized up to 20 times of minimum investment threshold enabling them to utilize their unused capacity,” the release said.