Currently, players like Nokia and Ericsson are making telecom equipment in India but the local content addition is around 40%. The government wants it to increase it to 100%.
The government is encouraging global telecom network manufacturers like Ericsson, Nokia, Samsung, Huawei, etc to make all their equipment in India with 100% local content, for which it is ready to provide a slew of incentives. The Department of Telecommunications (DoT) is scheduled to meet with the vendors on June 3 to take their suggestions and discuss how manufacturing in India can be expanded.
According to sources, the government wants to become self-sufficient in telecom equipment manufacturing, primarily because of security concerns. “If all the equipment is manufactured here with 100% local content, the probability of control and snooping by foreign countries can be minimised,” said a source privy to the details.
Recently, there has been a debate globally about security of 5G networks and how countries are sceptical about using equipment from Chinese firm Huawei. As per reports, the UK government is also pursuing an alliance of 10 countries including India, to create an alternative pool of 5G equipment to avoid reliance on China and Huawei. The alliance, dubbed D10, will include India, Australia and South Korea along with G7 countries the US, the UK, France, Canada, Japan, Germany and Italy.
However, though the telecom vendors feel that making 100% of the equipment locally can be a possibility, they feel in such a case all the operators should be mandated to use Make in India equipment. “Currently only BSNL, being a state-run company has to follow the Make in India norms, while private players are free to buy from anyone. It does not make sense to increase capacity just for catering to BSNL,” said an official working with one of the global vendors.
Currently, players like Nokia and Ericsson are making telecom equipment in India but the local content addition is around 40%. The government wants it to increase it to 100%. Even local players like VNL and Tejas Networks are sourcing some of the components from abroad, so even they are not 100% local.
It must be mentioned that the Digital Communications Commission (DCC), which is the highest decision-making body of DoT, in its meeting held on May 11 has already cleared the production-linked incentive (PLI) scheme to promote telecom equipment manufacturing in India.