India’s PLI Scheme Boosts Telecom and Electronics Manufacturing

The Production Linked Incentive (PLI) Scheme has proven to be a game-changer for India’s telecom and electronics manufacturing sectors. Launched to promote local production and reduce import dependence, the scheme has yielded impressive results in just a few years.

Telecom Equipment Manufacturing Takes Off

• Production Surge: Within three years, the PLI scheme for telecom has attracted significant investment (₹3,400 crore), leading to a massive increase in domestic production of telecom equipment (over ₹50,000 crore).
• Export Potential: This domestic production boom has fueled exports, reaching approximately ₹10,500 crore.
• Job Creation: The increased activity has generated over 17,800 direct jobs and many more indirect ones, boosting the economy.
• Reduced Reliance on Imports: The scheme has significantly reduced import dependency (60% import substitution), with India becoming nearly self-sufficient in key areas like antennae, GPON, and CPE.

Mobile Phone Production Flourishes

The PLI scheme for large-scale electronics manufacturing has also had a transformative impact on India’s mobile phone industry:

• From Importer to Exporter: India has transitioned from a major phone importer to a significant exporter. In 2023-24, domestic production reached 33 crore units, with exports exceeding 5 crore units. This represents a remarkable shift from just 5.8 crore units produced in 2014-15.
• Export Value Soars: The value of mobile phone exports has skyrocketed, reaching ₹1,28,982 crore in 2023-24, compared to a mere ₹1,556 crore in 2014-15.
• Import Dependence Plummets: Import reliance has plummeted, dropping from ₹48,609 crore in 2014-15 to a mere ₹7,665 crore in 2023-24.

Key Achievements

• Industry Growth: The PLI scheme has spurred exceptional growth in both telecom equipment and mobile phone production.
• Job Creation: The initiative has generated substantial employment opportunities across the value chain.
• Reduced Import Dependency: India’s reliance on imported telecom equipment has significantly decreased, promoting self-reliance and national security.
• Global Competitiveness: Indian manufacturers are now competing globally, offering competitively priced, high-quality products.
• Export Diversification: India’s export basket is transforming, with high-value telecom equipment reaching markets like North America and Europe.

Promising Future

The PLI scheme, coupled with other government initiatives, has significantly bridged the gap between telecom imports and exports. The combined value of exported telecom equipment and mobiles now exceeds ₹1.49 lakh crore, compared to imports of ₹1.53 lakh crore. This trend signifies a shift towards a trade surplus and a globally competitive Indian telecom and electronics manufacturing sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.