A department of telecommunications (DoT) task force has recommended that the government provide incentives up to 75% for domestic design and manufacturing of telecom chipsets.
Currently, under the Rs 76,000-crore incentive scheme for development of semiconductors and display manufacturing ecosystem in the country, the government is providing a fiscal support of 50% of the project cost, which is uniform across all technology nodes.
Semiconductors are used in manufacturing all kind of products, ranging from mobile phones & electronic products to automobiles.
Though the semiconductor incentive policy has been drafted by the ministry of electronics and information technology (MeitY), which is also the implementing agency, DoT had set up several task forces to suggest measures to boost domestic telecom manufacturing. One of the term of reference was to recommend measures to manufacture high volume telecom chipsets in the country.
The task force on telecom chipsets was headed by Tejas Networks co-founder Sanjay Nayak, and included representatives from industry, academia and various government departments. It submitted its recommendations to the government on Saturday.
Among the other recommendations, the task force on telecom chipset development has said that the government needs to support fabless chip design of telecom chips in order to increase domestic value addition. Initially, the focus can be on six types of telecom chipsets – three used in consumer premises equipment (CPE) and three used in network communication modules.
“There is a $4 billion (around Rs 32,000 crore) domestic market for telecom chipsets and we need to substitute it with Indian chips across fixed wireless access (FWA), routers, 5G networks, etc,” a government official said, adding that the task force also recommended identifying original equipment makers (OEMs) in India to support development of Indian chipsets.
Some of the other task forces under the domestic manufacturing mission, which also submitted their recommendations on June 3, relate to telecom components manufacturing, efficient customs and logistics support, telecom export promotion, and new telecom equipment opportunities.
With regard to new telecom equipment opportunities, the task force, led by director general of VoICE, Rakesh Kumar Bhatnagar said the mission critical and security sensitive projects of the government should be implemented using domestic products.
“We need to enhance the scope to include all telecom products including those used in enterprise networks where domestic control exists and call them trusted sources. All public procurement should happen from trusted sources,” said Bhatnagar. He said that there is a huge opportunity for domestic telecom equipment makers as global telecom spends are estimated at $260 billion by 2025 and out of that India spends are estimated to be $16 billion.
The task force also recommended incentivising telcos to buy domestically designed and manufactured products.
On export of telecom equipments, the government is mulling to launch a national champions policy which will include support from the Ubharte Sitaare Programme (USP) which identifies Indian companies with good export potential. The task force on export promotion said there should be telecom equipment testing infrastructure in key manufacturing clusters. Further, a reduction in the logistics turnaround time in ports and airports must also be considered.
Also read: India’s exports to grow higher than world average: StanChart
Among other key things, the task force on telecom components recommended incentivising distributor warehouses of component in India, as well as setting up a liberal free trade warehousing zone trade policy.
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