India’s Telecom Equipment Sector Can Become USD 50 Billion Export Hub By 2035: NITI Aayog

New Delhi, Aug 17 (KNN) India's telecom and network equipment (TANE) sector has significant potential to expand domestic manufacturing and exports, but high import dependence, particularly on China, remains a key challenge, according to a NITI Aayog report.

The report said targeted policy support could help the sector increase its contribution to India's GDP to 1-1.5 percent, generate around 5 lakh skilled jobs and position the country as a USD 50 billion export hub by 2035.

Imports Far Exceed Exports

India's TANE exports remained limited at around USD 0.6-1 billion annually during 2020-24, accounting for just 0.2-0.3 percent of total exports, reported ANI.

In comparison, annual imports stood at around USD 4-5 billion, or 0.7-1.1 percent of total imports. More than 80 percent of critical components, including those used in 4G and 5G antennas and signal processors, are sourced from China, the report said.

The sector's dependence on globally distributed supply chains also exposes manufacturers to disruptions in key markets. Indian telecom equipment can incorporate components and technologies sourced from countries including Taiwan, Japan and the US.

High Cost Disadvantage For Domestic Manufacturers

The report highlighted a fiscal disadvantage of up to 26 percent for Indian manufacturers of generic telecom and network equipment compared with global competitors in high-value-added segments.

The disadvantage can rise to 29 percent in product categories where imported equipment benefits from extended buyer's credit, it said.

Domestic manufacturing is also concentrated largely in low-value assembly, with domestic value addition often remaining below 20 percent.

PLI Scheme Among Key Support Measures

The government has introduced measures such as the Production Linked Incentive (PLI) scheme to strengthen domestic telecom equipment manufacturing.

NITI Aayog said continued policy support could help increase domestic production, deepen value addition and reduce import dependence.

The report linked the sector's potential to the objectives of the National Telecom Policy 2025, including expanding connectivity, increasing the sector's economic contribution and strengthening India's position in global technology and manufacturing value chains.

It said stronger government intervention could help accelerate domestic manufacturing, support import substitution and enable India to emerge as a competitive global hub for telecom and network equipment.

(KNN Bureau)