With significant growth in recent years, the telecom sector has become a cornerstone of India’s digital vision. Besides providing connectivity, it serves as a catalyst for equity and opportunity, bridging gaps between rural and urban areas and fostering socio-economic inclusivity. This transformative role highlights the need for a strong manufacturing ecosystem to meet growing consumer demands and sustain the sector’s momentum in innovation and development.
In this regard, the government has taken significant measures over the years to strengthen the core of manufacturing hubs in India. In 2014, there were only two mobile manufacturing units in the country, but today, there are over 200 manufacturing units. While India initially relied heavily on imports, the country now produces six times more phones domestically and has gained recognition as a mobile exporter. From chips to finished products, India is striving to launch a fully Made-in-India phone in the global market, supported by significant investments in the semiconductor ecosystem.
So far, telecom manufacturing has created more than 17,800 direct jobs and several indirect jobs. The Indian telecom industry is likely to attract investments in the areas of core competency and cutting-edge technologies to ensure efficiencies and create economies of scale. This, in turn, will increase exports, making India an integral part of the global value chain. Under the government’s “Atmanirbharta Abhiyan”, the Department of Telecom (DoT) aims to promote the research and development (R&D) ecosystem, transforming India into a global hub of technology development and telecom equipment manufacturing.
Key industry initiatives driving R&D
In the areas of design and R&D, the government has taken several initiatives to help companies develop new and cutting-edge technologies for both domestic and international markets. The government has been emphasising the need for “Design in India, Design for the World”, promoting indigenous design capabilities and urging the creation of products that cater to both global and domestic customers. The government has also established several task forces to ensure the smooth functioning of the telecom ecosystem.
The initiatives mainly focus on building a robust component ecosystem, developing telecom chips from design to production, training skilled workers and designers, and streamlining manufacturing by aggregating demand from various departments and allocating it to eligible manufacturers. Additionally, they aim to optimise the use of test beds for product testing and certification.
Further, a strong emphasis on design and intellectual property creation is key to achieving India’s vision of becoming a product nation, as design elements significantly enhance product value. To this end, and to support the development of a 5G ecosystem, DoT has approved 17 companies under the design-led manufacturing framework of the production-linked incentive (PLI) scheme.
Design-led manufacturing scheme under PLI
DoT has also introduced the Digital Communication Innovation Square under the Champion Services Sector Scheme, which aligns with the Make in India initiative and aims to drive innovation and R&D in telecom, encouraging companies to design and manufacture products domestically. Its main objective is to promote the ecosystem for research, design, development, proof-of-concept testing, intellectual property rights (IPR) creation, pilot projects and manufacturing, making India a global hub for telecom equipment production and a centre for digital communication services. The scheme focuses on setting national standards, contributing to global standardisation and promoting India-specific telecom applications for socio-economic growth. The scheme encourages collaboration among academia, start-ups and industries while bridging the gap between R&D and commercialisation. As of 2023, the scheme had released funds worth Rs 190.64 million to almost 66 beneficiaries.
Telecom Technology Development Fund
Telecommunication technology development requires substantial and patient capital for R&D and commercialisation. To address this, the government decided that, starting 2022, 5 per cent of annual collections from the Universal Service Obligation [USO] Fund will be allocated for R&D in the telecom sector. Launched in 2022, the Telecom Technology Development Fund has seen significant participation from start-ups, micro, small and medium enterprises (MSMEs), academia and industry. New courses have been suggested to align engineering programmes in electronics and communications with the industry’s evolving needs.
As of December 2024, DoT is set to approve the first batch of applications from domestic companies seeking funds for localised R&D activities, by January next year. These include proposals for 5G Intelligent Village, quantum encryption algorithm and quantum standardisation, and testing labs. This move will provide access to about Rs 5 billion every year to Indian companies, eventually promoting IPR creation, and leading to design-led manufacturing in areas such as 5G; 5G Advanced; 6G; satellite technologies; internet of things; optical and communication technologies; backhaul radio; core, aggregation and edge routers; ethernet switches; edge computing solutions; software-defined networking and network function virtualisation. The government also aims to facilitate the adoption and commercialisation of locally developed telecom technologies and solutions through the USO Fund-driven schemes.
This initiative will promote technology ownership and domestic manufacturing in the telecom sector, reduce imports and create export opportunities for Indian companies.
Recent developments: Strengthening the ecosystem
In October 2024, Ericsson announced plans to expand its R&D operations in India, focusing on artificial intelligence (AI), generative AI and 6G technologies. The company aims to develop application programming interfaces to support advanced use cases such as fraud detection, device management and security. Ericsson’s existing R&D centres in Chennai, Bengaluru and Gurugram play a key role in this initiative, underscoring India’s significance in the company’s global strategy.
In May 2024, DoT organised the inaugural “Telecom Design Collaboration Sprint” at IIIT Bangalore, bringing together 15 start-ups, MSMEs and academic institutions such as IIT Madras, Centre for Development of Telematics and IIT Delhi. This initiative aimed to foster rapid ideation and develop innovative solutions for a comprehensive 5G infrastructure, setting the groundwork for future advancements into 6G technology. The collaboration focused on leveraging collective strengths, developing holistic solutions and creating market opportunities, thereby addressing existing gaps in India’s telecom ecosystem and preparing for emerging technologies.
Meanwhile, Reliance Jio’s development of an indigenous 5G stack exemplifies India’s Design in India and Make in India initiatives. This comprehensive solution includes 5G radios, core networks, AI and machine learning (ML) platforms, and cloud infrastructure, all developed domestically. By leveraging digital twin technology alongside AI and ML, Jio has rapidly expanded its 5G network, now serving over 100 million unique users and covering nearly 90 per cent of India’s population within a year of its launch in October 2022. This achievement highlights India’s growing capabilities in telecom innovation and self-reliance.
Further, global telecom equipment manufacturers such as Cisco and Nokia have set up their manufacturing units in India, fostering world-class manufacturing prowess. These efforts, among others, have emerged as a testament to the country’s indigenous engineering and entrepreneurial capabilities, as well as manufacturing expertise.
Addressing the challenge
Despite the government’s efforts to launch various schemes and initiatives to promote design and R&D in the telecom sector, a significant challenge remains – insufficient funding. DoT has been allocated Rs 11 billion for fiscal year 2025, which accounts for just 0.03 per cent of India’s GDP. Of this, only Rs 4 billion is designated for R&D, an insignificant amount in comparison to countries such as China and the US, which dedicate 2-3 per cent of their GDP to tech R&D. For instance, China, a leader in 6G research, has allocated around $1.55 trillion to telecom R&D. Additionally, the high costs associated with upgrading existing 4G and 5G infrastructure to accommodate 6G services present another significant hurdle for the sector.
The way forward
India’s telecom sector must prioritise strengthening its R&D ecosystem, fostering collaboration among academia, start-ups and industries, and skilling the workforce to meet the demands of emerging technologies such as 5G, AI and 6G. Expanding manufacturing capacities for telecom equipment, accelerating semiconductor development and promoting sustainability will be crucial for achieving self-reliance.
By focusing on policy stability, exports and global competitiveness, India can solidify its position as a global telecom hub, driving innovation, reducing import dependency and creating a robust ecosystem for future growth.
