Indian Telecom Equipment Makers Raise Concerns Over Benefits to Foreign Firms

New Delhi, Jul 16 (KNN) Indian telecom equipment manufacturers are voicing concerns over policy advantages given to foreign companies like Ericsson and Cisco, as these global players expand their local operations to tap into India’s growing telecom infrastructure.

The issue has sparked a debate at the Department of Telecommunications (DoT), which is balancing two priorities — attracting global manufacturers and supporting the growth of domestic firms, according to The Hindu.

A key concern is that foreign firms assembling equipment in India may qualify as Class-II suppliers under the 2017 Make in India public procurement policy, allowing them to bid for government projects even with partial local production. Meanwhile, Indian companies are seeking a level playing field.

Foreign telecom firms are also lobbying for duty exemptions and relaxed norms for importing components that are either unavailable or produced in limited quantities in India — most of which currently come from China.

Domestic firms argue that such concessions could weaken the intent of promoting indigenous manufacturing, especially when Chinese equipment remains restricted in India due to security concerns.

In June, the DoT began drafting changes to local content rules under the 2017 policy to address these challenges. A DoT notice noted that India’s weak component ecosystem makes it difficult to achieve 50–60 per cent local content in telecom products and called for industry feedback.

According to Ajay Srivastava of the Global Trade Research Initiative, foreign firms often operate under outsourcing models in India, with profits and intellectual property (IP) retained by parent companies abroad.

For instance, Cisco’s India arm earns a margin of just 5–10 per cent, compared to its global average of 65 per cent.

An industry executive suggested a possible solution: introducing a weighted system that favors Indian-owned IP, locally fabricated components, and domestically developed software to support truly indigenous innovation.

(KNN Bureau)