HFCL to apply for PLI in telecom products

HFCL, a domestic telecom equipment and fiber optic company, has decided to participate in the Production Linked Incentive Scheme (PLI) for the manufacturing of telecom and networking products.

DoT is likely to release the final details of the Rs 12,195 crore PLI scheme for the telecom sector in the next few days. Under this, eligible companies will be offered incentives in the range of 4 to 6 percent for 5 years. Confirming the news, HFCL Chairman Mahendra Nahata said, “We will definitely participate in the eligibility for PLI scheme on telecom equipment. The PLI scheme will give a tremendous impetus to the Make in India campaign in this area, especially for the upcoming 5G technology.

HFCL will be the second domestic company to avail the scheme. The first company is Dixon Technologies which has set up a joint venture with telecom company BhartiAirtel. BhartiAirtel will hold 24 percent stake in this joint venture. Under the agreement, the JV will sell most of its products to Airtel, which will also be its largest customer.

HFCL currently supplies telecom equipment and fiber optics to most of the existing Indian telecom operators. These include Reliance Jio (for example, Fiber to Home), BSNL and other state-run telecom infrastructure companies working on Bharat Net fiber broadband networks to connect rural India. At present, HFCL gets about a quarter of its revenue from the fiber business. The domestic telecom equipment market is also expected to open up as companies like Reliance Jio are now testing their indigenous 5G networks. Reliance Jio has made it clear that it will support any indigenous technology provided its quality is the same.

According to the government’s feedback, the PLI scheme for the telecom sector has attracted the attention of global companies, EMS companies and domestic companies. These include gear maker Nokia and Ericsson in Europe, which already have some manufacturing businesses in India. Apart from this, American companies Cisco and Siena and EMS companies such as Cibil, Foxconn and Flex are also included.

Domestically, apart from HFCL and Dixon, other companies like Sterlite Technologies can also participate in the PLI scheme. The main objective of this scheme is to reduce the huge import bill of telecom equipment in the country.