As per the DoT’s recent notice seeking stakeholder comments, it has proposed a review of the PPP-MII order dated October 21, 2024, specifically addressing the list of notified products, product-wise local content (LC) requirements (including the ceiling on LC for design), input conditions (including design) qualifying as LC, and the criteria for calculating LC for software products.
In the guidelines issued for the PPP-Make-in-India order in 2024, the DoT had identified 36 products that must have over 50 per cent local value addition to qualify for procurement by the central government and its affiliated entities. While 5G products were excluded from the list, the DoT had included an enabling provision to allow for a periodic review of the products.
Currently, products that must have a minimum of 50 per cent LC include routers, ethernet switches, media gateways, customer premises equipment, gigabit passive optical network (GPON) equipment, satellite phones and terminals, optical fibre and cable, and telecom batteries.
While tightening norms to promote MII, the government had excluded imported items sourced locally from resellers and distributors from LC calculations. Additionally, royalties and technical charges paid outside India, as well as the supply of repackaged and refurbished goods, are not considered part of LC.
Further, in public procurement, preference is granted to class-1 suppliers. If a class-1 supplier is unable to fulfil the order, then class-2 suppliers are given the opportunity. All companies manufacturing products under the Production-Linked Incentive (PLI) scheme for telecom equipment are classified as class-2 suppliers. A class-1 supplier must have 50 per cent LC, while a class-2 supplier needs 20 per cent LC.
Furthermore, stakeholders have been asked to submit their comments within 30 days.
