India’s Telecom Momentum: How PLI, MSMEs and Exports Are Rewiring the Nation’s Global Ambition
In the post-pandemic world, where digital infrastructure defines economic potential, India’s telecom sector is undergoing a strategic renaissance. At the heart of this transformation is the Production-Linked Incentive (PLI) Scheme for telecom and networking products, an initiative that is not only bringing fresh investment into the country but is also pushing India’s MSMEs onto the global manufacturing map.
The data is telling. As of May 31, 2025, beneficiary firms under this scheme have invested ₹4,305 crore, resulting in ₹85,391 crore worth of sales, including ₹16,414 crore in exports. This is no small feat. It’s a testament to how well-targeted policy, when paired with execution and ecosystem participation, can spark sector-wide change.
Telecom PLI: From Policy Paper to Production Power
Launched in 2021 with a dedicated outlay of ₹12,195 crore, the telecom PLI scheme was born out of a strategic need to reduce India’s over-dependence on imported telecom equipment especially in the wake of rising geopolitical concerns and supply chain disruptions. Its goal: reward domestic manufacturing that leads to incremental sales, innovation, and most importantly, exports.
Today, 42 companies have been approved under the scheme, of which 28 are MSMEs. This speaks volumes about how inclusive the policy has been not just catering to legacy manufacturers or tech giants but giving smaller players a fighting chance to compete in high-value telecom manufacturing.
As shared in a recent Lok Sabha reply by Minister of State for Communications, Dr. Pemmasani Chandra Sekhar, the scheme has also generated over 28,000 direct jobs, a significant outcome in a sector typically known for low headcount operations due to automation.
MSMEs: No Longer the Side Story
What’s truly remarkable is the role of micro, small, and medium enterprises (MSMEs) in this transformation. Long regarded as ancillary units or low-value suppliers, MSMEs in India’s telecom landscape are now building base stations, IoT modules, routers and network testing kits, not just for domestic deployment but also for export.
This change is not accidental. The PLI scheme includes provisions that give design-led manufacturing a greater incentive a move that has encouraged MSMEs to invest in R&D and go beyond assembly to become IP creators. Several startups and small tech firms have begun licensing their solutions abroad, entering new markets in Africa, Southeast Asia, and the Middle East.
With international telecom vendors diversifying away from China and looking for new sourcing partners, Indian MSMEs; agile, frugal, and now increasingly compliant are emerging as viable alternatives.
Exports Surge
India’s telecom export story, until recently, was largely muted. But the ₹16,414 crore in exports recorded under the PLI scheme indicates a fundamental shift. These aren’t just cables or SIM cards being shipped; we’re talking about 5G radios, software-defined routers, broadband gear and other advanced components.
Indian firms, backed by design incentives and certification support, are meeting international benchmarks, competing against players from South Korea, Vietnam and even some EU states.
Moreover, as India signs more bilateral trade deals (such as with the UAE, Australia and the UK), tariff-free corridors are opening up for Indian telecom manufacturers. Export support under programs like the Remission of Duties and Taxes on Exported Products (RoDTEP) is further cushioning MSMEs from international pricing pressure.
Innovation on the Ground
The telecom PLI is not an isolated scheme. It feeds into a larger innovation push spearheaded by the Department of Telecommunications (DoT). Through the Digital Communications Innovation Square (DCIS), the government has funded over 126 early-stage R&D projects, led by MSMEs and startups, with a cumulative allocation of ₹108 crore.
These projects span next-gen wireless technologies, low-latency applications, Open RAN designs and indigenous chipsets all crucial for India’s digital sovereignty and competitiveness.
Additionally, BharatNet India’s flagship rural broadband initiative has already connected 2.14 lakh Gram Panchayats (GPs) with high-speed fiber internet. This massive infrastructure rollout is enabling not just rural digitization but also creating decentralized demand for telecom equipment and services further opening up opportunities for MSMEs.
5G, Spectrum, and Policy Synergy
Complementing the production push is the government’s bold spectrum policy. In 2022 and again in 2024, India held spectrum auctions offering airwaves in 700 MHz, 3300 MHz, and 26 GHz bands. These auctions were technology-agnostic, meaning companies acquiring spectrum are free to deploy any International Mobile Telecommunications (IMT) standard, including 5G and future 6G platforms.
This flexibility is catalysing rapid 5G rollouts, and by extension, is boosting domestic demand for network hardware and services a demand increasingly being met by PLI-backed Indian companies.
Telecom Meets Rural Commerce
Interestingly, the telecom transformation is not limited to metros or urban demand. The Department of Posts has taken parallel strides with projects like Dak Ghar Niryat Kendras, which support MSME exports from remote areas; and initiatives to digitize postal banking and insurance. This is extending the reach of telecom and fintech services deep into rural India, where digital literacy and infrastructure once lagged.
By collaborating with e-commerce firms and fintech platforms, India Post is integrating last-mile delivery with digital connectivity, creating new micro-markets for telecom solutions a space MSMEs can now explore.
From Catching Up to Leading
India’s telecom PLI scheme has proven that industrial policy when focused, funded, and inclusive can deliver results at scale. But the journey is far from over.
For India to truly lead in telecom manufacturing, the next steps must include:
- Scaling component-level supply chains to reduce import dependence on semiconductors and PCBs
- Accelerating domestic testing and certification labs to boost time-to-market
- Expanding access to low-cost working capital for MSMEs participating in global supply chains
- Investing in telecom-specific skilling programs to build a future-ready workforce
If these priorities are acted upon, India won’t just be part of the global telecom supply chain it will shape it.
India’s telecom ecosystem is clearly on the move from being a market of users to becoming a hub of producers and innovators. The PLI scheme has played the role of a catalyst, but it is the participation of MSMEs, startups and entrepreneurs that is making the real difference.
As exports rise, jobs get created and rural markets get connected, one thing becomes clear: India is not just making telecom equipment it’s building telecom equity.
