New Delhi: The Department of Telecommunications (DoT) has incorporated a clause in the latest public procurement policy order to ensure preferential treatment to domestic companies that achieve scale and capacity of such products to boost manufacturing of locally developed 5G technology products.
The move will allow local companies to have an edge over their global counterparts in public sector contracts for 5G gear procurement.
"The intent is to give a clear signal to make India a telecom product nation in advanced technologies such as 5G and leading to 6G. As and when local Indian companies get ready to make such products at scale, these will find their way into our MII procurement orders so that they can be sourced from within India," telecom secretary Neeraj Mittal told ET.
While issuing the draft guidelines on public procurement with preference to ' Make in India' rules, the DoT had identified 36 products that must have over 50% local value addition to be eligible for procurement by the central government and its affiliated entities. But 5G products were excluded from the list, on which local players raised concerns.
The DoT has now notified the final rules, incorporating the clause around local 5G products. The government has taken note of the fact that 5G products with indigenous technology are currently being tested in the country.
"Table-A (the list of 36 products) shall be reviewed from time to time and addition of 5G products/virtual routers shall be considered based on manufacturing capacity. Domestic manufacturers and their associations are encouraged to pro-actively provide evidence of manufacturing capacity from time to time to DoT to enable inclusion of such products," the DoT said in the notification.
As per experts, more than 10 domestic companies like Tejas, Lekha Wireless, VVDN and Galore are looking to make 5G products with some already doing trials utilising BSNL spectrum.
Currently, the list of products where the minimum local content has to be over 50% include routers, ethernet switches, media gateways, customer premises equipment, GPON equipment, satellite phones and terminals, optical fibre and cable, and telecom batteries.
On certain products, the minimum local content must be 65%. The list will be modified when local firms start large-scale manufacturing of 5G products.
Tightening the norms and pushing Make in India in July, the government had excluded imported items sourced locally from resellers and distributors from the calculation of local content.
Besides, royalties, technical charges paid out of India and supply of repackaged and refurbished goods were excluded from the calculation of local content as per the order issued by the Department of Promotion of Industry and Internal Trade.
The 36 products identified by DoT have sufficient local capacity and local competition. In public procurement, preference is given to class-I suppliers. In case, the class-I supplier is not able to supply, class-II supplier will be given a chance.
A class-I local supplier means a supplier whose goods and services offered for procurement have at least 50% local content while a class-II supplier has at least 20% local content. All manufacturers making products under production linked incentive scheme for telecom and networking products will be treated as class-II suppliers for the specified products.
The move will allow local companies to have an edge over their global counterparts in public sector contracts for 5G gear procurement.
"The intent is to give a clear signal to make India a telecom product nation in advanced technologies such as 5G and leading to 6G. As and when local Indian companies get ready to make such products at scale, these will find their way into our MII procurement orders so that they can be sourced from within India," telecom secretary Neeraj Mittal told ET.
While issuing the draft guidelines on public procurement with preference to ' Make in India' rules, the DoT had identified 36 products that must have over 50% local value addition to be eligible for procurement by the central government and its affiliated entities. But 5G products were excluded from the list, on which local players raised concerns.
The DoT has now notified the final rules, incorporating the clause around local 5G products. The government has taken note of the fact that 5G products with indigenous technology are currently being tested in the country.
"Table-A (the list of 36 products) shall be reviewed from time to time and addition of 5G products/virtual routers shall be considered based on manufacturing capacity. Domestic manufacturers and their associations are encouraged to pro-actively provide evidence of manufacturing capacity from time to time to DoT to enable inclusion of such products," the DoT said in the notification.
As per experts, more than 10 domestic companies like Tejas, Lekha Wireless, VVDN and Galore are looking to make 5G products with some already doing trials utilising BSNL spectrum.
Currently, the list of products where the minimum local content has to be over 50% include routers, ethernet switches, media gateways, customer premises equipment, GPON equipment, satellite phones and terminals, optical fibre and cable, and telecom batteries.
On certain products, the minimum local content must be 65%. The list will be modified when local firms start large-scale manufacturing of 5G products.
Tightening the norms and pushing Make in India in July, the government had excluded imported items sourced locally from resellers and distributors from the calculation of local content.
Besides, royalties, technical charges paid out of India and supply of repackaged and refurbished goods were excluded from the calculation of local content as per the order issued by the Department of Promotion of Industry and Internal Trade.
The 36 products identified by DoT have sufficient local capacity and local competition. In public procurement, preference is given to class-I suppliers. In case, the class-I supplier is not able to supply, class-II supplier will be given a chance.
A class-I local supplier means a supplier whose goods and services offered for procurement have at least 50% local content while a class-II supplier has at least 20% local content. All manufacturers making products under production linked incentive scheme for telecom and networking products will be treated as class-II suppliers for the specified products.
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