India’s telecom sector has steadily pushed for localisation, in line with the central government’s goal of self-reliance (Atmanirbhar Bharat). Telecom equipment spans core networks, radio access network (RAN), semiconductors, optical fibre, 5G gear, edge devices and software, making them critical infrastructure for any economy. Until 2014, India imported nearly 90 per cent of these equipment, which had raised economic and security worries. However, now, import substitution is significantly visible, especially in smartphones, making India the third largest exporter of smartphones in the world. According to official government data, export value rose from $10,955.2 million in financial year 2022-23 (FY 2023) to $24,138.04 million in FY 2025, while import value fell from $1,410.76 million in FY 2023 to $923.59 million in FY 2025. This points to stronger local manufacturing and a much more ­favourable handset trade balance.

The question is, why the need to localise now and can India repeat the smartphone export success story? The key reason behind this is to reduce the possibility of geopolitical shocks that could disrupt this miss­ion-critical sector and to build self-reliance for a secure future.

Benefits of localisation

Local manufacturing can lift industrial gross domestic product, create jobs and save foreign exchange. With scale, oper­ators can get cheaper gear and pass savings to users, supporting Digital India. New factories also support many allied industries and skilled jobs.

Telecom networks are critical infrastructure. Relying on foreign suppliers carries risks from back doors or supply cut-offs during conflict. Localisation gives more control over the supply chain and enables security audits. The government can remove the gear on national security grounds when needed. Indigenous capability also reduces the risk of sanctions and builds supply chain resilience, a lesson from the Covid-19 pandemic and the ensuing chip shortages.

Being a producer and exporter of telecom tech also boosts global influence. India can offer trusted, affordable networks to partners in South Asia, Africa and Latin America and use this position in trade and ­diplomacy. This fits the idea of India as a supplier of solutions to the developing world.

There is also long-term value in shaping global standards and building intellectual property. Developing Indian 5G and 6G technologies puts Indian engineers and firms on the patent map and gives India a voice in how networks evolve.

Recent policy and regulatory developments

Over the past year, the government announced major steps to boost domestic telecom manufacturing, including the draft National Telecom Policy, 2025. The draft places special focus on indigenous production. Key goals of the draft, in terms of localisation, include 150 per cent growth in telecom manufacturing output, 50 per cent import substitution through design-led Indian products, and a stronger push on localisation, research and development (R&D) and export competitiveness.

These goals align with the production-­linked incentive (PLI) scheme, 2021, for telecom and networking products, which was tweaked to encourage design-led manu­facturing. Products designed and made in India get an extra one per cent incentive, with Rs 40 billion reserved from the Rs 121.95 billion outlay. The scheme was extended by a year to FY 2027 due to Covid-19 delays. Additionally, work has also started on a second PLI, focused on components such as casings, antennas and fibre, with phased localisation targets to deepen the value chain.

Security policy has tightened as well. Under the National Security Directive on Telecom, operators must buy from trusted sources, which has effectively kept Chinese vendors out since 2021. In late 2024, these rules expanded to internet of things (IoT) devices and modules, and rules now prefer indigenously designed products for surveillance and IoT. Customs duties on some hardware were also raised, such as printed circuit board assembly from 10 per cent to 15 per cent in the 2024-25 budget, to encourage local sourcing.

Policy attention has also turned to R&D and standards. India’s 5Gi standard was merged into the Third Generation Partnership Project in January 2022 to ensure global compatibility. The Centre for Development of Telematics (C-DOT) has been funded to develop 4G and 5G technologies and tax breaks support the in-house R&D. Further, an electronics components PLI of Rs 229.19 billion is planned to cover telecom semiconductor parts to strengthen local chip design and fabrication.

Localisation across the value chain

The core network and radio domain, long led by global original equipment manufacturers, now has Indian players. As of September 2025, over 90,000 4G sites have been deployed with home-grown tech, deployed by  a TCS-led consortium, including Tejas Networks and C-DoT, and a software upgrade to 5G is planned after a full roll-out. Private telcos are also switching to local ­options. As per Reliance Jio, about 80 per cent of its 5G stack is indigenous and includes radios, core, operational support systems/business support systems and small cells. Bharti Airtel piloted a made-in-India Open RAN (O-RAN) solution with the Tata Group. Further, wider use will depend on matching the performance of established vendors.

A major bottleneck for the country is the semiconductor sector. The $10 billion chip incentive programme began in 2021. However, it was only in September 2025 that India unveiled its first indigenous chips, including the Vikram 32-bit processor built by the Semiconductor ­Laboratory under the Ministry of Electronics and Information Technology, in collaboration with the Indian Space Research Organisation’s Vikram Sarabhai Space Centre. It is qualified for space missions and can also serve defence, aerospace, advanced automotive and high-reliability energy uses. For telecom gear, most chips and advanced parts are still imported. Local chip design is growing, but until new fabs and packaging plants are operational, core semiconductors for radios and switches will come from global suppliers such as Qualcomm, Intel and Broadcom.

Meanwhile, India has made solid gains in the optical fibre cable space. Domestic firms such as Sterlite Technologies Limited (STL) and Himachal Futuristic Communications Limited (HFCL) are competitive in optical fibre and export to several regions. STL had entered wireless products but exited that business in early 2023 to refocus on optics. Tejas Networks supplies optical transmission and routing systems and exports widely. Overall, localisation is relatively strong in fibre and backhaul, and India is close to self-sufficiency in fibre cable and gigabit passive optical network.

Private sector initiatives and key players

Coming to telcos, Jio is building an in-house 5G core and sourcing RAN software via Radisys. The O-RAN focus has led to multiple partnerships. Similarly, Jio and Sanmina have set up a plant in Tamil Nadu to make hardware for Jio networks, with plans to use its own 5G stack more widely and explore exports. Additionally, local sourcing of antennas and work on Indian-designed chipsets for affordable devices have followed.

Airtel is working with the Tata Group and TCS on indigenous 5G solutions and using them in select deployments. A joint venture with Dixon Technologies makes routers and fibre modems and could extend to radio units, replacing imports. Airtel is also working with Qualcomm on 5G fixed wireless and with Mavenir on O-RAN in rural sites, to diversify vendors and cut costs through local sourcing.

Similarly, TCS has emerged as a strong telecom systems integrator through the Bharat Sanchar Nigam Limited (BSNL) 4G/5G project. Meanwhile, Tejas has expanded from optics to a broader gear portfolio and reportedly led PLI incentives last year. The group aims to package the BSNL solution for export to Asia, Africa and Latin America, which could create an Indian original equipment manufacturer (OEM) at scale.

DoT’s contradictory signal

Despite these positive developments, recent policy signals have created uncertainty. The Department of Telecommunications (DoT) has floated a plan to relax local content thresholds under the Public Procurement (Preference to Make in India) Order for telecom gear, saying that the current 50-60 per cent local content requirements are hard to meet, given today’s component base. This sends mixed signals. While DoT intends to ease the burden on domestic manufacturers, they have pushed back, warning it would weaken the Make in India initiative and allow global vendors to qualify with limited localisation and hurt PLI-led investments and jobs. Industry bodies want the government to keep or tighten norms and boost component-level incentives instead.

Challenges ahead

Costs remain a hurdle. The Telecom Regulatory Authority of India has noted that making telecom hardware in China can be 12-13 per cent cheaper than in India, mainly due to massive economies of scale in manufacturing, lower labour costs and efficient supply chain management. Without scale, Indian gear may cost more. STL’s exit from the 5G radio business shows the difficulty of competing on price. Continued support and productivity gains through automation will be needed, or private telcos will hesitate to buy local at scale and exports will be hard.

Further, India still lacks depth in many components such as radio frequency (RF) parts, optical transceivers, field programmable gate arrays and speciality materials. The new focus on graded duties and a component PLI aims to build local vendors over time. Electronics Manufacturing Scheme players such as VVDN are helping, but reaching 70-80 per cent local content could take at least another 5 to 10 years.

Specialised talent is another gap that needs to be bridged. India needs more RF engineers, protocol developers and chip designers. Although training programmes exist, their scale must increase. Private R&D spend is modest compared to global leaders. Attracting top talent and scaling research for the 6G era will be critical, and government-funded efforts such as the IIT Madras 6G centre and C-DOT’s research are steps in that direction.

The way forward

India’s telecom localisation journey represents a strategic shift from import depend­ence to manufacturing self-reliance. While challenges remain, the foundation is now in place for India to emerge as both a major consumer and producer of telecom technology. In the past year only, localisation has picked up speed. India is capturing more of the value chain, from radios and fibre systems to the core software. Investments and jobs are rising and import dependence is easing, but the journey has only begun. India must keep building the ecosystem, invest in R&D and learn lessons in self-sufficiency from global giants such as China to overcome hurdles and bridge gaps.

India is pursuing an “open localisation” path that welcomes global players to build in India, while growing local champions. For telecom leaders, localisation has become an industry need, not just a policy slogan. The next few years will show if India can be both a major market and a maker of telecom technology, delivering a more resilient digital network for 1.4 billion people and a strong­er role in global supply chains.

Shashwat Singh