In Short:
The Department of Telecommunications (DoT) has updated its procurement policy to favor Indian companies that produce 5G technology, giving them an advantage over foreign firms in public contracts. The new rules now include 5G products, which previously were not listed, requiring that at least 50% of their content must be locally sourced. The finalized list includes various telecom products like routers and optical fibers. The government also aims to support local manufacturing by prioritizing suppliers with higher local content. Additionally, imported goods from resellers and certain royalties are excluded from local content calculations.
Support for Local 5G Manufacturing: A New Initiative
The Department of Telecommunications (DoT) is making waves with an exciting addition to its public procurement policy! They’ve just included a clause that gives a hearty thumbs up to domestic companies, encouraging them to step up their game in the realm of locally developed 5G technology products.
An Edge for Local Businesses
With this new measure, local firms now hold a competitive advantage over their international counterparts when it comes to snagging public sector contracts for essential 5G equipment. This shift aims to bolster the manufacturing capabilities of our homegrown tech heroes.
Details of the Initiative
Originally, as part of the draft guidelines prioritizing the ‘Make in India’ movement, the DoT specified that 36 products would require over 50% local value addition to qualify for procurement by the central government and its bodies. However, there was some unease as 5G products were notably absent from this critical list.
The good news? The final rules have now been updated to include this very crucial category of products. The government recognizes that indigenous 5G technology is currently undergoing testing right here in the country.
What’s on the List?
The products requiring more than 50% local content span a diverse range, including:
- Routers
- Ethernet switches
- Media gateways
- Customer premises equipment
- Gigabit Passive Optical Network (GPON) equipment
- Satellite phones and terminals
- Optical fibre and cables
- Telecom batteries
Increasing Local Content Standards
In addition, there are products where the requirement climbs to a minimum of 65% local content. As our local industries ramp up their production capabilities for 5G goods, this list will evolve accordingly.
Focusing on Genuine Local Manufacturing
In a bid to tighten these new norms and champion the ‘Make in India’ initiative, the government has clarified that imported items sourced through local resellers and distributors will not factor into local content calculations. Also excluded are royalties and technical charges paid outside India, as well as repackaged or refurbished goods.
Prioritizing Homegrown Suppliers
Among the 36 products identified by the DoT, there’s ample local competition and capacity. In public procurement scenarios, class-I suppliers—companies that contribute at least 50% local content—receive preference. Should they be unable to supply, class-II suppliers (who provide at least 20% local content) will have their moment to shine.
