The Department of Telecommunications (DoT) has implemented sweeping changes to its public procurement policy, marking a transformative shift in India’s telecommunications sector. Furthermore, this strategic initiative aims to empower domestic manufacturers and reduce dependency on foreign imports.
Policy Framework and Implementation
The DoT has established rigorous requirements for local value addition in telecom manufacturing. Under the new guidelines, companies must achieve over 50% local content to qualify as Class-I suppliers for government contracts. Additionally, the policy covers 36 essential telecom products, including routers, media gateways, and ethernet switches.
The government has tightened regulations by excluding imported components from local content calculations. Moreover, items sourced from local resellers and distributors no longer count toward meeting domestic requirements. Telecom Secretary Neeraj Mittal emphasizes that this move will establish India as a prominent telecom product nation.
Companies participating in the Production Linked Incentive scheme automatically qualify as Class-II suppliers. Subsequently, this creates additional opportunities for manufacturers investing in domestic production facilities. The policy particularly focuses on emerging 5G technology products, with plans to expand the list as local capabilities grow.
Key Beneficiaries
Major telecom operators like Bharti Airtel and Reliance Jio stand to gain significantly from these changes. Meanwhile, their substantial investments in local manufacturing align perfectly with the new requirements. These companies have already established robust domestic supply chains.
Domestic equipment manufacturers emerge as primary beneficiaries of this policy shift. For instance, Tejas Networks leads the transformation with its advanced manufacturing capabilities. Similarly, companies like VVDN and Lekha Wireless have begun conducting trials using BSNL spectrum.
L&T Technology Services demonstrates strong potential for growth under the new framework. Consequently, their existing manufacturing infrastructure positions them well for securing government contracts. Small and medium enterprises focusing on component manufacturing will likely see increased opportunities.
The policy establishes a clear hierarchy for supplier preference in public procurement. First priority goes to Class-I suppliers with 50% or more local content. In contrast, Class-II suppliers, maintaining 20% local content, receive second preference in the procurement process.
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Aim Of Policy Change
The emphasis on local content will intensify competition among Indian manufacturers. Therefore, consumers can expect improved product quality at competitive prices. Local companies will increase investments in research and development activities. Subsequently, this will accelerate the development of indigenous telecommunications technology.
Enhanced manufacturing activities will create numerous job opportunities across the sector. Moreover, this will contribute significantly to skill development in telecommunications. The policy encourages domestic manufacturers to proactively demonstrate their production capabilities.
Companies achieving scale and capacity in 5G product manufacturing receive preferential treatment. Consequently, this incentivises investment in advanced technology development. The move allows local companies to gain a competitive edge over global counterparts in public sector contracts.
What Will the Future of the Industry Look Like?
The DoT plans to conduct regular reviews and updates of the product list. Particularly, they will focus on including new 5G products as domestic manufacturing capabilities expand. Furthermore, this flexibility ensures the policy remains responsive to technological advancements.
Local manufacturers can submit evidence of their production capacity to secure inclusion in the preferred supplier list. Meanwhile, the government actively monitors the development of indigenous 5G technology products. The policy represents a decisive step toward achieving telecommunications self-reliance.
Through these comprehensive measures, India aims to position itself as a global hub for telecom equipment manufacturing. Additionally, the policy shift aligns perfectly with the broader ‘Make in India’ initiative. The transformation of the domestic telecom manufacturing landscape has begun.
The exclusion of imported components signals a strong commitment to genuine local manufacturing. This creates a clear pathway for industry growth and innovation. The policy establishes India’s determination to lead in advanced telecommunications technology.
Written By Fazal Ul Vahab
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