Production Linked Incentive Scheme in Telecom and Networking Products

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Production Linked Incentive Scheme in Telecom and Networking Products

In the world, India is the 2nd largest telecom market with 765 million broadband subscribers. It provides employment to 4 million people in India and contributes 7% of all FDI inflow in the country. 

So, to attract large-scale investment in telecom equipment manufacturing and increase the domestic production capacity, the Government of India has introduced the PLI Scheme for Telecom and Networking products.

PLI Scheme : Production Linked Incentive Scheme

PLI Scheme full form is Production Linked Incentive Scheme. And, it is estimated that by utilizing the full Scheme funds will increase the production in the country. The production cost around Rs. 2.4 lakh crore with export of around Rs. 2 lakh crores over 5 years. This scheme is in line with the Make in India objective. 

But, to take the PLI incentives of the scheme, the businesses included in the telecom and networking must check the eligibility and process to take the benefit of the PLI scheme. Complete PLI scheme details with timeline mentioned below.

Qualification and Eligibility for PLI Scheme

The benefit will only provide to the companies for manufacturing of goods in India, which fall under the Scheme Target Segments. Also any foreign investment in the applicant company must be in compliance with FDI Policy 2020. The eligibility is as follows:

1. MSME

Companies registered as Micro, Small & Medium Enterprises (MSME) with the Ministry of MSME, Government of India.

2. Non MSMEs

The Non MSMEs are those companies which are not falling under the MSME category. The Non MSMEs category is further divided in two categories:

Domestic Company: According to the scheme guidelines, a company owned and controlled by an Indian citizen or Indian company known as a “Domestic Company”. The 50% of the capital must be contribute by a resident Indian citizen or company.

Global Company: The global company is the one which does not fall under the category of domestic company. So, if business is set up in one or more countries either by itself or including its Group Companies as defined in the Scheme guidelines.

Application Process of PLI Incentive Scheme

1. The application must apply on the online portal of PLI.  (https://www.pli-telecom.udyamimitra.in).
2. The applicant should register on the portal before filing an application form and upload 3 documents, namely –
   • PAN
   • Authority Letter for Nodal Officer
   • Certificate of Incorporation.
3. After submitting the above information, applicants must send a mail to the Nodal Officer's email id with a link for verification of a mobile number.
4. Once all the information and documents get checked by the PMA and the process gets complete. Applicants will receive a mail towards successful registration on the Portal within 2 working days.
5. Next, the Nodal Officer will be able to Sign-in the Portal by using his registered mobile number and OTP and start the submission of application.

Note: Access the application format on the Production Linked Incentive Scheme portal. The format available on the website is only to get the understanding of the information required to submit online.

Further Process of Scrutiny and Payment

1. The section – 3 (commitment section) of the application should be password protected. So, once the application gets submitted, section 3 will get unlocked for scrutiny by PMA/DoT.
2. The applicant needs to pay non-refundable application fee of Rs.1 Lakh by RTGS / NEFT in the bank details as under:
   • Bank Name: Indian Overseas Bank
   • Beneficiary Name: PAOHQDOTNEWDELHI
   • Account No.: 256502000001000
   • Branch:Sanchar Bhawan Branch, 20 Ashoka Road, New Delhi
   • IFSC Code: IOBA0002565
3. After receiving the application PMA will check the information of application such as documents, certificates, proof of deposit of application fees etc. Remember, the application gets submitted within 15 working days from the last date of Application submission.
4. If any deficiency appears in the application then PMA shares this with the applicant. The applicant should rectify the deficiency within 15 working days from the date of intimation of the deficiency by PMA. If failed to do sp, then application will mark ineligible for the Scheme. 
5.  After completion of the scrutiny process, the list of shortlisted eligible applications will recommend by PMA to DoT for approval of the Competent Authority.

Timeline for Claim Application

1. If any deficiencies appear in the application during the scrutiny, then within 7 days from the date of submission of the claim application the errors must rectify by the applicant. 
2. For any deficiency found in the final rectification of claim application form, then within 15 days the error rectifies from the last date of rectification.
3. The final approval of the claim will complete in 23 days from the date of final recommendation by PMA to DoT.

Note: Overall time taken by PMA for initial scrutiny of claim application (S.No.1) and recommendation (S.No.3) should be undertaken within the overall timeline of 22 days.

Conclusion

The scheme's objective is to boost domestic manufacturing, investments in, and exports of telecom and networking products. For that, DoT (Department of Telecommunications) has issued a notification about the production linked incentive scheme. Businesses must follow the set DoT compliances for the schemes. To get started with the scheme, fulfill the PLI scheme details shared above.

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