Sixteen companies participating in India’s telecom production-linked incentive (PLI) scheme failed to meet their investment targets, the minister of state for communications, Pemmasani Chandra Sekhar, stated in a written reply to parliament. The shortfall is attributed to the telecom equipment market’s predominantly business-to-business nature, with only a few major service providers as buyers.
According to Sekhar, procurement decisions by service providers depend on commercial and technical factors. Some PLI beneficiary companies were unable to secure sufficient supply orders, which led them to halt planned investments for expanding manufacturing capacity. This dynamic has affected the overall progress of the PLI scheme aimed at boosting domestic telecom equipment production.
The telecom equipment market’s B2B structure limits the number of buyers, primarily large service providers, which influences investment decisions. The PLI scheme was designed to encourage local manufacturing and reduce import dependence, but the lack of guaranteed orders has constrained companies’ willingness to invest. This situation highlights challenges in aligning government incentives with market realities in the telecom sector.
The government’s response in parliament clarifies the reasons behind the investment shortfall among PLI beneficiaries. The next parliamentary session will review the progress of the telecom PLI scheme and assess measures to improve order flow and investment outcomes, according to the minister’s statement.