Can India Make It In Telecom Manufacturing?

Based on global best practices, there are challenges on the ground which, if overcome through suitable policies, can make the manufacturing sector globally competitive and efficient

- TV Ramachandran

We pride ourselves that India is the world's fifth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP), as per IMF. It is projected to be a $5 trillion economy by 2026-27. However, while ICT and software services have been poster boys of success, we have been laggards in manufacturing, and this needs urgent attention to boost employment and self-sufficiency.

In consonance with the goal of 'Atmanirbharta' or self-reliance in the area of manufacturing in the ICT sector, the Government has brought out some excellent production linked incentive schemes for giving boost to manufacturing in the ICT and telecom sector. However, based on global best practices, there are challenges on the ground which, if overcome through suitable policies, can make the manufacturing sector globally competitive and efficient.

One of the key challenges to enable our locally manufactured products to compete in the world market when it comes to exports, is the 5-6% cost differential in manufacturing in India. This cost disparity of goods manufactured in India for exports vis-à-vis existing global manufacturing hubs (like Malaysia and China) needs to be comprehensively addressed for 'Made in India for Export strategy' to be successful. There is a need to offset this cost disparity by providing export incentives of about 5% for electronics/telecom products through government schemes such as the PLI/MEIS Schemes.