India needs a multi-pronged approach!

“To succeed, India needs long-term, consistent policies to support indigenous technology development. It should identify and invest in key technologies where India can gain a competitive edge. Encouraging collaboration between government, academia, and industry is crucial. Strategic partnerships with global leaders for technology transfer and joint development can accelerate progress.”

“The ability to design and manufacture advanced 5G and 4G equipment positions India as a strategic partner in the global telecommunications landscape. It opens up possibilities for India to contribute to the digital transformation of other nations, particularly in the developing world, aligning with the broader vision of ‘Digital India’ on an international scale.” 

How do you analyse the growth of telecom equipment production sales crossing ₹50,000 crore under the PLI scheme?
The crossing of the ₹50,000 crore milestone in telecom equipment production sales under the Production Linked Incentive (PLI) scheme is a remarkable achievement for India’s telecom sector. This growth demonstrates the effectiveness of the government’s initiatives to boost domestic manufacturing and reduce import dependence. It can be attributed to increased investor confidence in India’s telecom manufacturing capabilities, growing domestic demand for telecom equipment (especially with the 5G rollout), supportive government policies and incentives, and improved ease of doing business in the sector. This success not only strengthens India’s position in the global telecom supply chain but also contributes to job creation and economic development. It’s a positive step towards realizing the vision of ‘Atmanirbhar Bharat’ (self-reliant India) in the crucial telecom sector. However, to sustain this momentum, continued focus on research and development, skill development, and maintaining a conducive policy environment will be crucial.

How happy are you with the ₹3,400 crore investment attracted by the Telecom PLI scheme within three years, and how is foreign investment affecting domestic innovation in India’s telecom sector?
The ₹3,400 crore investment attracted by the Telecom PLI scheme is note-worthy and demonstrates the scheme’s effectiveness in stimulating growth in the sector. This level of investment indicates strong confidence in India’s telecom manufacturing potential and the government’s supportive policies. Foreign investment is playing a crucial role in driving domestic innovation in India’s telecom sector. It brings advanced technologies and processes, helping Indian firms upgrade their capabilities. Collaboration with global players enhances the skills of the local workforce. Foreign investments should come with commitments to set up R&D centres, fostering innovation. The presence of global players motivates domestic companies to innovate and improve their offerings. Moreover, Indian companies get opportunities to become part of global supply chain network. While the investment and its impact on innovation are positive, it’s important to ensure that domestic companies aren’t overshadowed. Balancing foreign investment with the growth of indigenous capabilities will be key to long-term success. The government should continue to support local R&D efforts and startups to maintain a healthy ecosystem of both foreign and domestic innovation.

How do you look at the development of telecom equipment designed and manufactured in India being exported to almost 70 countries?
The export of Indian-designed and manufactured telecom equipment to nearly 70 countries is a significant achievement that showcases India’s growing technological prowess, particularly in the realm of 5G and 4G technologies. This development aligns perfectly with the government’s ‘Make in India’ and ‘Digital India’ initiatives, positioning India as a potential global hub for high-quality telecom equipment manufacturing.

The success in exporting telecom equipment is particularly noteworthy in the context of India’s 5G rollout, where approximately 80% of the equipment used in India’s 5G deployment is locally produced. This high level of domestic manufacturing not only supports the country’s self-reliance goals but also demonstrates that Indian-made 5G technology is of international standard and competitive in the global market.

Companies like Tejas Networks, HFCL, and Reliance Jio have played crucial roles in driving this localization effort. Their success in developing and manufacturing cutting-edge 5G and 4G solutions has contributed significantly to India’s ability to export to such a wide range of countries. This achievement is further bolstered by government initiatives like the Production-Linked Incentive (PLI) schemes, which have incentivized both domestic and international companies to expand their manufacturing bases within India.

The export surge of 35% reported by the Department of Telecommunications underscores the growing global acceptance of Indian telecom products. This not only contributes to India’s economic growth through increased foreign exchange earnings but also enhances the country’s reputation as a reliable source of advanced telecom solutions.

Moreover, this development has implications beyond commercial success. The ability to design and manufacture advanced 5G and 4G equipment positions India as a strategic partner in the global telecommunications landscape. It opens up possibilities for India to contribute to the digital transformation of other nations, particularly in the developing world, aligning with the broader vision of ‘Digital India’ on an international scale.

How can India bridge its fixed broadband gap and catch up globally?
To bridge its fixed broadband gap and improve its global standing, India needs a multi-pronged approach. Accelerating the BharatNet project to connect all gram panchayats with high-speed broadband and focusing on last-mile connectivity in both urban and rural areas is crucial. Utilizing a combination of fibre optic, wireless, and satellite technologies can help reach remote areas cost-effectively. Encouraging collaboration between the government and private sector can speed up infrastructure deployment and service delivery. Implementing policies to make broadband services more affordable for the average consumer, potentially through subsidies or tax incentives, is essential. Launching nationwide programs to increase awareness about the benefits of broadband and improve digital skills can drive adoption. Simplifying regulations and it is continuously encouraging more players in the broadband market. Offering tax breaks or other incentives for companies investing in broadband infrastructure, especially in underserved areas, can boost deployment. Implementing and enforcing strict quality of service norms can ensure reliable and high-speed connections. Encouraging the creation of local language content and services can drive broadband adoption. Integrating broadband planning into smart city projects can ensure comprehensive digital infrastructure. By implementing these strategies, India can work towards closing its broadband gap and improving its global competitiveness in digital connectivity.

Can India’s push for indigenous tech reduce import dependence in telecom?
India’s push for indigenous technology has the potential to significantly reduce import dependence in the telecom sector, although it faces challenges. India’s large and growing telecom market provides a strong base for indigenous technologies. Government initiatives like ‘Make in India’ and PLI schemes are encouraging local manufacturing. India has a large pool of skilled IT and telecom professionals, and Indian institutions and companies are increasingly focusing on telecom R&D. However, challenges remain. In some areas, there’s still a significant gap between Indian and global technologies. Achieving economies of scale to compete with global players on cost can be challenging, and building a complete ecosystem of component manufacturers and suppliers takes time. To succeed, India needs long-term, consistent policies to support indigenous technology development. It should identify and invest in key technologies where India can gain a competitive edge. Encouraging collaboration between government, academia, and industry is crucial. Strategic partnerships with global leaders for technology transfer and joint development can accelerate progress. Active involvement in global telecom standards development is also important. While complete self-reliance may not be immediately achievable, a strategic push for indigenous technology can significantly reduce import dependence in the medium to long term. The key lies in balancing the development of domestic capabilities with strategic global partnerships.

How can India address infrastructure issues to compete in telecom infrastructure?
To improve its telecom infrastructure and enhance competitiveness, India needs to focus on several key areas:

1. Right of Way (RoW) Issues: Streamline processes to reduce inconsistencies and delays in obtaining RoW permissions from local authorities.
2. High Costs: Address the significant investment required for building a nationwide fiber optic network, especially in remote and rural areas.
3. Property Tax and Local Levies: Resolve the issue of telecom infrastructure being subject to property taxes and local levies despite exemptions in the Telecommunications Act, 2023.
4. Coercive Actions: Introduce provisions in RoW Rules 2024 to prevent coercive actions against telecom networks, which can disrupt services and lead to financial penalties for operators.
5. Dispute Resolution: Establish dedicated dispute resolution mechanisms in RoW Rules 2024 to prevent delays in network deployment and complications in compensation recovery.
6. Electricity Availability: Ensure 24×7 electricity availability to maintain network availability higher than 99.5%. Address the high operational costs due to electricity tariffs, which account for about 30% of Opex for telecom towers.
7. Input Tax Credit: Extend the availability of Input Tax Credit for telecom towers under the GST Act, 2017, to reduce the cost of services.

Additional strategies to enhance competitiveness include:
– Investing in edge computing infrastructure to support 5G and IoT applications
– Developing a national plan for strategic placement of data centers
– Improving power supply reliability in rural areas
– Creating a single-window clearance system for telecom infrastructure projects
– Implementing smart city initiatives that integrate advanced telecom infrastructure.

Can India influence global telecom standards despite its current lag?
Yes, India can influence global telecom standards despite its current lag. The country’s vast market, rapidly growing technological adoption, and improving manufacturing capabilities provide a solid foundation for this endeavour. The Telecommunications Standards Development Society, India (TSDSI) plays a pivotal role in representing India’s interests in global standards bodies like ITU and 3GPP.

The Department of Telecommunications (DoT) is actively contributing to this goal by establishing strategic partnerships and focusing on telecom diplomacy. Government initiatives, such as the Production-Linked Incentive (PLI) scheme, are boosting domestic manufacturing and innovation. This growing domestic capability provides a stronger platform for India to influence global standards.

India is implementing a multi-faceted approach including increasing R&D funding, particularly in emerging technologies like 6G and quantum communications, encouraging patent filings through policy incentives, strengthening TSDSI’s role and capabilities, and leveraging its large market size to influence global standards and technology adoption.

India’s hosting of the World Telecommunication Standardization Assembly (WTSA) in October 2024 presents a significant opportunity to showcase its progress and shape future telecom standards. Additionally, India is fostering collaboration between government, industry, and academia, as well as cultivating alliances with other developing countries to push for standards that address shared needs.

By addressing these challenges and capitalizing on its strengths, India aims to enhance its influence on global telecom standards, particularly in emerging technologies like 5G and 6G. With continued focus on innovation, collaboration, and strategic development, India is positioning itself to transition from being the world’s second-largest telecom market to a true global leader in telecommunications, capable of influencing and setting international standards.

How will India keep its telecom infrastructure competitive amid AI and IoT advancements?
India is poised to keep its telecom infrastructure competitive amid advancements in Artificial Intelligence (AI) and the Internet of Things (IoT) through strategic investments, regulatory support, and technological innovation. The country is working on policies to support the adoption and development of advanced technologies like 5G, IoT, and M2M.

The Telecommunication Act 2023 provides a robust regulatory framework that encourages innovation, enhances security, and promotes technological convergence. The Act establishes a Regulatory Sandbox to facilitate the testing and deployment of new AI applications in a controlled environment. It also empowers the government to set standards for cybersecurity, encryption, and data processing in telecommunications, building trust in AI applications that handle sensitive data.

By investing in R&D, enhancing infrastructure, embracing AI and IoT, and ensuring regulatory compliance, India aims to keep its telecom infrastructure competitive in an increasingly digital world. These strategies will bolster the domestic telecom industry and position India as a significant player in the global telecom landscape. The government is also promoting initiatives like ‘Make in India’ and the Production Linked Incentive (PLI) Schemes to boost domestic manufacturing and innovation. In-Building Solutions (IBS) will play an important role in enhancing the usage of 5G technology in urban dense buildings.

A robust fibre network is foundational for advanced technologies. The National Optical Fiber Network (NOFN) or BharatNet aims to establish a comprehensive fibre optic network across the country, providing high-speed broadband connectivity to both urban and rural areas.

To remain competitive in the face of AI and IoT advancements, India should:

1. Invest in AI and machine learning for network optimization and management.
2. Develop IoT-specific network slices in 5G infrastructure to support diverse applications.
3. Create a regulatory framework that supports AI and IoT innovation while addressing security and privacy concerns.
4. Encourage cross-sector collaboration to drive innovative applications.
5. Build a skilled workforce through targeted education and training programs.
6. Ensure robust cybersecurity measures for AI and IoT deployments.
7. Promote the development of India-specific AI and IoT solutions.

How can India balance cybersecurity and openness in its telecom ecosystem?
The Telecommunications Act 2023 significantly address the balance between cybersecurity and openness in India’s telecom ecosystem. It aims to create a robust security framework to protect essential mobile networks from cyber threats while also promoting innovation and accessibility. The Act establishes a Regulatory Sandbox, which allows telecom companies to experiment with new technologies in a controlled environment, encouraging innovation without compromising security.

However, the Act also grants the government broad powers to take control of telecom services during emergencies, raising concerns about potential overreach and surveillance. This duality presents a challenge in ensuring that necessary security measures do not encroach on individual freedoms and digital rights.

In summary, while the Telecommunications Act 2023 provides essential frameworks for enhancing cybersecurity in India’s telecom sector, careful implementation is crucial to ensure it does not compromise the principles of openness and individual privacy. Balancing these aspects will be key for fostering a secure yet innovative telecom environment that supports India’s digital transformation goals.

How can India prepare a policy to streamline RoW policies and Input Tax Credit?
To streamline Right of Way (RoW) policies and Input Tax Credit (ITC) for the telecom sector, India can adopt several measures. While the Telecommunications Act, 2023 provides a framework for RoW for telecom infrastructure, issues related to property taxes, local levies, coercive actions, and dispute resolution persist.

Input Tax Credit for Telecom Towers: The non-availability of ITC on telecom towers under the GST Act, 2017 has significantly increased service costs. Initially, the Draft Bill of November 2016 included telecom towers under ITC. The exclusion of telecom towers undermines the GST’s goal of preventing tax cascading and ensuring seamless credit flow across the supply chain. This exclusion has resulted in a financial burden of approximately ₹18,000 crore. Therefore, the GST definition should be amended to include telecom towers under ‘Plant and Machinery’, enabling telecom infrastructure providers to claim ITC.

Tax Depreciation Accessories: There are several infrastructure assets, including DG sets, battery banks, electric equipment, and IMPS, which collectively serve as passive infrastructure assets in addition to telecom towers. These assets support the telecom equipment mounted on the towers. To facilitate cost recovery within the economic lifespan of these accessories, it is proposed to raise the tax depreciation rate on them from 15% to 65%. Alternatively, these other passive infrastructure assets could be classified under the definition of plant and machinery.

RoW Policies and Implementation: The Ministry of Communication (DoT) has issued various policies, such as the National Digital Communications Policy (NDCP) 2018 and RoW guidelines in 2016, 2017, 2021, 2022, and 2023, aimed at creating robust digital infrastructure. These policies address issues like deemed approval, uniform charges, and single-window clearance. However, only 28 states/UTs have adopted the RoW (Amendment) Rules, 2022, and only 10 states/UTs have adopted the RoW (Amendment) Rules, 2023. States like Bihar, Chhattisgarh, Gujarat, Karnataka, Nagaland, Punjab, Tamil Nadu, Telangana, and Delhi (NDMC/MCD) are yet to adopt these amendments.

To streamline Right of Way (RoW) policies and Input Tax Credit (ITC) for the telecom sector, India can adopt several measures:

1. Develop a National RoW Policy: Implement uniform processes and fee structures across all states and municipalities to avoid discrepancies and reduce confusion for telecom operators.
2. Create a Single-Window Clearance System: Establish a single-window system to handle all RoW permissions, making it easier for operators to submit applications and obtain necessary approvals.
3. Implement a Digital Platform for RoW Applications: Develop an online platform for RoW applications and tracking to ensure transparency and expedite the approval process.
4. Clarify and Simplify ITC Rules for Telecom Companies: Provide clear guidelines on ITC eligibility for telecom infrastructure, including passive assets like DG sets, battery banks, electric equipment, and IMPS, to minimize disputes and ensure seamless credit flow.
5. Special Tax Treatment for Critical Telecom Infrastructure: Consider providing special tax incentives for investments in critical telecom infrastructure, such as towers, fibre, ducts, and related equipment, to promote sector growth.
6. Align State and Central Government Policies: Ensure that state and central government policies are aligned to prevent conflicts and create a cohesive regulatory environment conducive to telecom infrastructure development.
7. Introduce Time-Bound Approvals: Mandate time-bound approvals for RoW applications to avoid unnecessary delays in infrastructure deployment and ensure timely execution of telecom projects.
8. Address Property Tax Issues: Ensure that telecom infrastructure is excluded from property tax considerations, in line with the Telecommunications Act, 2023, to reduce financial burdens on telecom operators.
9. Issue Clarifications on Passive Infrastructure Eligibility for ITC: Request the GST Council to issue necessary clarifications on the eligibility of passive infrastructure assets for ITC, or amend the definition of ‘Plant and Machinery’ to include these assets.

Implementing these strategies will improve the ease of doing business in India’s telecom sector, reduce costs, and support the expansion of digital infrastructure.