The Telcom Regulatory Authority of India (Trai) has proposed a concurrent PLI scheme focussing on components and sub-assembly manufacturing to strengthen the local supply chain.

The regulator has released an extensive set of recommendations to promote the manufacturing of networking and telecom gear in India through tax benefits, a dedicated master fund and other incentives.

Trai has proposed an additional two per cent benefit under the design-led PLI scheme for product lines meeting certain criteria.

It has also proposed a dedicated “Networking and Telecommunications Equipment Development” fund.

The regulator has recommended a lower corporate tax for enterprises continuously engaged in R&D-driven manufacturing and earn half of its turnover based on IPRs.

This is meant to spur innovation and encourage industry's drive towards owning intellectual property rights (IPRs).

A dedicated telecom software development fund with an initial committed corpus of Rs 1,000 crore should be established under the public-private partnership mode with a minimum Rs 3,000-crore corpus, by seeking participation from venture capital funds.

In PLIs, Trai has recommended a concurrent PLI scheme focussing on components and sub-assembly to facilitate collaborated manufacturing activities.

Further, the schemes should have local value-addition norms. The government needs to offer incentives in proportion to the value addition in manufacturing.

In design-led PLI, beyond the one per cent benefit, another two per cent benefit should be introduced for such product lines that yield a minimum local value-addition of 75 per cent.

Telecom service providers should get incentives in the form of lower applicable gross revenues on an annual net basis - equivalent to the aggregate certified value of such indigenous products deployed in their networks during a financial year.

Tech shortlist

Around 30 out of 40 applicants are expected to qualify for a Rs 17,000-crore production-linked incentive scheme for IT hardware, according to a government official.

As many as 40 companies, including Dell, HP, and Lenovo, have applied for the IT hardware PLI (production-linked incentive) scheme, reports PTI.