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Mint
4 days ago
- Business
- Mint
Draft telecom policy proposes incentives for using made-in-India gear
New Delhi: The government is looking to incentivise telecom operators for using indigenously designed and manufactured equipment, according to the draft National Telecom Policy (NTP), 2025. The move could boost local gear makers such as Tejas Networks, HFCL, STL, and startups in the domain and level the playing field with global manufacturers, including Nokia, Ericsson, Samsung and Cisco. Currently, private telecom operators largely rely on global companies to provide network equipment for rolling out their 5G services and expanding their 4 G network. The proposal echoes a similar provision in the 2018 policy that saw little implementation, raising concerns about execution this time. 'Incentives for telecom operators to buy domestic telecom products was also part of the last National Digital Communications Policy – 2018. However, we did not see any implementation of the same,' said Rakesh Bhatnagar, director general of Voice of Indian Commtech Enterprises (VoICE), which represents local gear makers. Bhatnagar said several Indian startups and companies are capable of supplying quality telecom equipment, but operators need support, including lower levies, so they can start using locally made gear. The draft NTP 2025 does not detail the kind of incentives to be given to telecom operators for using locally designed and manufactured equipment. 'Incentivising the use of locally designed and manufactured telecom gear is a welcome move, but we've seen similar efforts before. The telecom PLI scheme, despite good intent, saw limited uptake: by FY25, only around half of the approved companies reportedly received payouts," said Sumeysh Srivastava, associate director at the public policy firm The Quantum Hub (TQH). According to Srivastava, without clear demand signals, streamlined procurement, and better alignment across policy levers, manufacturers will continue to face scale and cost challenges. The policy needs to go beyond incentives. Starting from building trust in Indian R&D, ensuring timely disbursements, and fostering an ecosystem designed to compete globally, not just comply locally, he said. On 23 May, Mint reported that out of the 42 companies that were shortlisted for the telecom PLI scheme, only half claimed incentives. Citing a Right To Information (RTI) request, Mint reported that the scheme disbursed ₹1,162.04 crore by the end of FY25, against the ₹12,195 crore approved for five years. The scheme was introduced in February 2021 to incentivize the local manufacture of equipment such as network switches, transmission gear and set-top boxes. Also Read | How Samsung and 20 others missed out on an ambitious incentives scheme Policy goals The draft policy focuses on six strategic missions for the telecom sector with certain goals for the next five years. This includes universal, meaningful and affordable connectivity, promoting innovation and research and development, domestic manufacturing, secure and trusted telecom network, ease of doing business and sustainable telecom. The draft NTP 2025 is open for public consultation for the next 21 days. Among its local manufacturing goals, the government aims to increase domestic telecom manufacturing output by 150%. It aims to achieve 50% import substitution through telecom products designed, developed, and manufactured in the country, according to the draft policy. According to a 2024 report by NITI Aayog, more than 40% of telecom equipment such as 4G/5G signal processing units and antenna, are imported from China. The draft outlines 10 objectives for the next five years. This includes universal and meaningful connectivity for all, doubling the contribution of the sector to India's GDP, and achieving an annual investment of ₹1 trillion in the sector. It also plans to double the export of telecom products and services, and double the number of telecommunications startups. Besides, the government is also looking to double the sectoral research and development spending on emerging telecom technologies, create 1 million new jobs, upskill/reskill 1 million workers to meet the future demand, and strengthen security using quantum communications. The government also aims to reduce the carbon footprint of the sector by 30%. On 27 May, Mint reported that the five-year National Telecom Policy 2025-2030 will have a key focus on R&D on new telecom technologies, specifying details on the draft policy. Also Read | Trai wants more enforcement teeth to rein in telcos, may ask govt to amend rules Trai wants more enforcement teeth to rein in telcos, may ask govt to amend rules Universal connectivity As part of the universal connectivity goal, the government is looking to cover 100% of the population by 4G and 90% by 5G, with accessibility of devices for all. The goal is to also increase fiberization of towers from 46% to 80% and achieve fiberization of all gram panchayats (GPs) under BharatNet with an uptime of over 98%, according to the draft policy. To be sure, the government had set a target to achieve 70% tower fiberization by FY25. Tower fiberization refers to the process of connecting mobile towers to high-speed fiber-optic networks. This ensures quality of services for consumers. In fact, the 2018 policy had set targets to provide universal broadband connectivity, increase the digital communications sector's contribution to GDP to 8% from 6% in 2017, create 4 million jobs, and fiberization of at least 60% of towers, among other areas, by 2022. According to industry executives, in some of the areas such as public Wi-Fi hotspots, tower fiberization, targets for BharatNet connectivity, and home broadband penetration, the progress has been slow. Over the next five years, the government plans to enable the provision of fixed-line broadband networks to 45 million to 100 million households in the country, deploy 1 million public Wi-Fi hotspots, and use community Wi-Fi networks as an alternative for last-mile connectivity. According to Srivastava of The Quantum Hub, the policy consciously avoids thornier questions around regulating OTT communication platforms, a long-standing ask from the industry. In the emerging technology area, the government is looking to handhold 500 tech startups and MSMEs specializing in emerging technologies. The goal is to attain 10% global share in 6G-related intellectual property rights (IPRs). '(The government will) introduce innovative financing models like funds of funds, blended finance etc, to expand funding opportunities for the pool of telecom startups in India,' the draft policy said. For safety and security of telecom networks, the government has also talked about conducting analysis of telecom and networking equipment deployed in telecom network to demarcate and segregate equipment from non-trusted sources.
Mint
08-06-2025
- Business
- Mint
Policy U-turn? New govt notice hints at easier local sourcing rules for telecom equipment makers
A government notice last week hinting at a possible flip-flop in India's local sourcing policy for telecom equipment has left domestic manufacturers such as Tata Group's Tejas Networks Ltd fretting about losing ground to global companies like Nokia and Ericsson. Under current rules, telecom equipment manufacturers must source 50-60% of their total bill of materials locally to be selected as Class-I local suppliers—the preferred bidder category—in tenders floated by public sector undertakings and ministries for certain products. However, in a notice dated 3 June, the Department of Telecommunications said India's limited components ecosystem posed challenges in achieving 50-60% local sourcing for electronic and telecom products. 'Recognizing this constraint, the conditions for local content qualification also requires a review," DoT said. But just eight months earlier, in October, the department had said 36 telecom equipment categories had sufficient local capacity and competition, and maintained a 50-65% local value-addition requirement for products such as ethernet switches, unified threat management platforms, 4G mobile systems, optical fiber, and certain Wi-Fi products. Domestic telecom equipment makers warn that any relaxation in the local sourcing policy would undermine India's self-reliance or Atmanirbhar Bharat agenda and give an unfair advantage to multinational firms. 'There is no need to reduce local content for telecom equipment. None of the domestic design-led players have raised the issue," said Rakesh Bhatnagar, director general of Voice of Indian Commtech Enterprises (VoICE), which counts Tejas Networks, HFCL Ltd, VVDN Technologies Pvt. Ltd, and STL Tech, among its members. 'It appears to be a back-door opening being made to support MNCs (multinational companies) and is totally going against the policy announcements being made at the highest level." Also read | Telcos slam Trai's satellite spectrum pricing as unfair, call for comprehensive review According to Bhatnagar, given the ongoing situation of neighbourly hostilities, India should ensure that no software and programmable parts in sectors such as electronics, telecom, space, and nuclear energy come from foreign suppliers. On the other hand, executives at foreign telecom equipment makers say a short-term relaxation is essential considering India's continued dependence on imports for key components such as semiconductors, advanced chipsets, and specialized telecom modules. Lately, companies such as Finland-based Nokia and Sweden's Ericsson have been lobbying the Indian government to relax certain rules so they can participate in government tenders, industry executives said. 'We are looking at all the possible options to participate in government tenders and pitch the government to relax certain rules," said an executive at a global equipment maker, adding that while a majority of the company's supplies go to private firms, the government sector is also a big revenue area for telecom equipment. Nokia, Ericsson, Tejas, HFCL and VVDN did not reply to queries emailed on Friday. Also read | Trai, telecom companies spar over data demand Make in India: Hits and misses India's local value-addition rules—issued as part of the Public Procurement (Preference to Make in India) Order, 2017 policy—specifies the eligibility criteria for manufacturers to be classified as Class-I local suppliers to government departments. Local-value addition refers to the percentage of a product's manufacturing cost that comes from components and processes done in India. Manufacturers meeting a minimum threshold—typically 50% or more—are classified as Class-I local suppliers, giving them preference in government tenders over other companies. In March, the government approved a $2.7-billion ( ₹22,919 crore) outlay to incentivize local manufacturing of electronics components, setting goals for domestic and foreign entities to establish local component manufacturing facilities at subsidies of up to 50% of the project costs. With the scheme, the government aims to increase the local value addition to 40% in electronics manufacturing from 20% now. State-owned Bharat Sanchar Nigam Ltd (BSNL) managed to roll out its 4G network on indigenous telecom stack developed by Tejas, Tata Consultancy Services Ltd, and the Centre for Development of Telematics. But several private companies still rely on equipment developed by global companies for a significant portion of their networks. Also read | How Samsung and 20 others missed out on an ambitious incentives scheme 'A short-term review of local content requirements is important to ensure that manufacturers remain competitive while the component ecosystem matures," said Paritosh Prajapati, chief executive and founder of Sweden-based GX Group, which is also a beneficiary of India's productivity-linked incentives (PLI) scheme for the telecom sector. He, however, acknowledged that any such relaxation could put pressure on smaller and mid-sized domestic players, especially those still in the process of building scale. 'Any relaxation must continue to incentivize companies to shift R&D (research and development), design, and IP (intellectual property) rights to India, aligning with the vision of Atmanirbhar Bharat," Prajapati said. India's PLI scheme has got global giants such as Apple Inc., Ericsson, Germany's Siemens AG, China's Foxconn, and The Netherlands' Philips NV investing and producing more in India, he pointed out. As per the government's October notice, product design work done in India must contribute up to 55% towards meeting the domestic-value addition policy's 65% threshold. However, 'there is very less design being done in India as the products are being assembled through contract manufacturers", said an executive at a local telecom gear maker, requesting anonymity. Also read | Next-gen telecom tech to get ₹1,000-crore yearly R&D boost under telecom policy Cracks in compliance The Department of Telecommunications, besides reviewing product-wise local content requirements, also plans to review conditions of inputs, including design, to be qualified as local content and the criteria for calculating local content for software products. 'While the Indian component manufacturing ecosystem is thriving, the government has to handhold it to help it build a stronger foundation to achieve the stated goal of $500 billion in electronics manufacturing by 2030," said Harsh Walia, partner at law firm Khaitan & Co. 'In order to do so, lowering the threshold may encourage more realistic compliance and foster growth in the sector while still promoting domestic production. However, it should be balanced to ensure continued support for local industries and avoid excessive reliance on imports," Walia said. 'By offering turnover and capex linked incentives for manufacturing of listed products, the government aims to increase investment in the (telecom) sector, which will further strengthen the manufacturing for telecom equipment and assist in its exponential expansion," he added. The Public Procurement (Preference to Make in India) Policy (PPP-MII) was introduced with the goal of strengthening domestic manufacturing and reducing dependency on imports, especially in critical sectors. The broader policy is handled by the Department for Promotion of Industry and Internal Trade (DPIIT), with other ministries notifying the same based on their respective areas to boost domestic manufacturing. Also read | The ambitious and ambiguous rise of Huawei as a telecom giant There have been multiple complaints, however, that tenders floated by various ministries have not been at par with DPIIT's rules and favour foreign brands. In 2024, DPIIT scrutinised 867 tenders on a random basis. Of these, 259 tenders were found to be non-compliant with the provisions of the Public Procurement (Preference to Make in India) Order, 2017. Reasons for non-compliance included mention of specific brands, excessively high turnover requirements, global tenders floated without approval from a competent authority, failure to follow notifications issued by the nodal ministry, and insistence on foreign certifications. In 2023, a government investigation also found an incorrect claim of local content by bidders that had won tenders floated by state-run organisations such as Maharashtra Metro Rail Corporation Ltd and Oil and Natural Gas Corporation Ltd.
Mint
07-05-2025
- Business
- Mint
Operation Sindoor: India on high alert for cyber attacks
There's a high risk of cyber attacks on India's digital infrastructure, government officials and cyber and telecom experts warned hours after Operation Sindoor . The department of telecommunications (DoT), along with the telecom operators are evaluating measures to enhance telecom security infrastructure in border and sensitive areas, according to officials. Also Read | 'Operation Sindoor' jitters fade: Nifty, Sensex script a resilient green run Indian Computer Emergency Response Team (CERT-In), under the ministry of electronics and IT (Meity) has issued advisories to high risk stakeholders such as banks and financial institutions informing of the cyber attack risks and the need to strengthen their systems, a government official said. Queries emailed to CERT-In, telecom operators and DoT, on Wednesday, did not initiate a response. India launched targeted missile strikes on nine sites in Pakistan and Occupied Kashmir in the early hours of Wednesday in an operation codenamed 'Sindoor" in retaliation of the Pahalgam terror attacks. Also Read | Operation Sindoor: Indian highways ready to support IAF with alternative runways Since the Pahalgam attacks, there have been numerous attempts to hack Indian websites and change their content or appearance, the official added. On Tuesday, minister of state for communications Chandra Sekhar Pemmasani also acknowledged that Pakistan has been attempting to hack cyber networks in India. "DoT is actively reviewing network security measures. Monitoring has been intensified in sensitive regions, and telecom operators have been issued directives to strengthen security protocols," a second government official said, adding that the home affairs ministry has also issued directions. Also Read | BSE, NSE cut website access outside India ahead of 'Operation Sindoor' According to industry executives, lawful interception and real-time surveillance capabilities, prevention of mobile signal spillover into neighbouring countries, and monitoring of unauthorized roaming connections near the borders, are among key steps that can be taken. 'With cloud infrastructure holding vast amounts of sensitive data, cyber domains are now the first lines of attack and in the coming years cyber sabotage could be as damaging as a missile strike," said Rakesh Bhatnagar, director general at Voice of Indian Communication Technology Enterprises (VoICE), which represents domestic telecom equipment makers and solution providers. According to Bhatnagar, Chinese telecom, power equipment, drones, SIM cards with their chips and operating systems can play havoc during war. 'We need to be prepared based on our security considerations." Dhiraj Gupta, co founder of cybersecurity provider mFilterit, said, 'In a military context, cyber attackers employ sophisticated tactics beyond conventional ransomware attacks, aiming to disrupt and destabilize enemy systems, create panic, or embarrass the adversary's government." "Expected attack vectors include Denial of Service (DoS) attacks that crash websites by overloading them, defacement attacks that alter content for showing off the hackers capabilities, and stealthy intrusions to gather sensitive intelligence from government systems that usually go unnoticed and are a more serious risk than any other form of attack," Gupta added. Cyber experts caution that not just the large public and private entities but individual systems and devices are also prone to cyberattacks as a part of parallel cyber warfare that is going on with the cross border attacks. 'It is the responsibility of threat intelligence teams to monitor the dark web closely, track hacker chatter and identify vulnerabilities before they're exploited," said Prasanna Kumar, co-head of Financial Services and Professional Group (FSPG), India, Aon, a professional services provider. 'Based on our observation, cyber attackers are no longer targeting just individual corporations, they're focusing on entire systems of unpatched devices, posing a serious threat not just to governments and businesses, but to every connected individual," Kumar added. Kumar said attackers are focusing on critical infrastructure which can disrupt public utilities, leading to a challenging environment for people. 'Public infrastructure like electricity, internet, and mobile networks are modern lifelines and when disrupted, the impact is immediate and widespread," he said. Another top cyber security consultant, suggested companies take action to tighten their line of defence against possible cyber attacks. 'After the Pahalgam attack, amid the tension between the two nations, Pakistani hackers have been actively trying to attack government websites, specifically on the northern front of India," said the head of forensics and cyber security at a top consulting firms, requesting anonymity. This could be seen in Pakistani hackers defacing Rajasthan's education department website in a cyber attack last week, he said, adding that after the latest attacks by India, 'we will continue to see specific targeted attacks on Indian digital infrastructure and the cyber security industry will be operating on high alert at least for the next two-three weeks". 'To mitigate the risk, Indian companies need to bolster their digital defence by assessing vulnerabilities, having a response plan in place, and closely monitoring network activity and the dark web for potential threats. With the situation likely to escalate, vigilance and preparedness are crucial to mitigate potential cyber risks," this person said.
