Local Telecom Gear Makers Get a Boost – But Imports Could Skyrocket!

Govt Might Go Easy on Rules for Local Telecom Gear Makers—But Here’s the Catch

Look, here’s the thing. The Indian government’s apparently thinking about cutting some slack for our homegrown telecom equipment guys. Sounds great for ‘Make in India’, right? But—and there’s always a but—this could also open the floodgates for imports. Local manufacturers are obviously thrilled, but the GX Group’s waving red flags like crazy. With India’s telecom sector blowing up, this balancing act between self-reliance and staying globally competitive is getting trickier by the day.

Where Our Local Telecom Gear Makers Stand Today

Let’s be real—India’s telecom manufacturing scene is a mixed bag. Sure, we’ve got players like Sterlite and HFCL, but it’s still a drop in the ocean compared to Chinese giants like Huawei. And honestly? The whole sector’s a bit of a mess. High costs, endless red tape, and barely any money going into R&D. I talked to this one exec from a Pune-based company (who didn’t want his name out there), and he straight-up said, “We’re only running at 60% capacity because jumping through regulatory hoops is killing our profits.” Ouch.

What the Govt’s Planning to Change

So, the buzz is that by late 2024, we might see a new policy—easier licensing, tax breaks, faster approvals. The DoT’s saying this could slash production costs by 15-20%. But here’s the kicker: remember what happened with solar panels in 2018? They tried something similar, and imports shot up by 22% because foreign companies just slapped a ‘Made in India’ sticker on their stuff and called it a day. History repeating itself? Wouldn’t be the first time.

GX Group’s Big Warning: Watch Out for Shell Games

GX Group isn’t holding back. They’re saying relaxed rules could turn into a free-for-all, with foreign firms sneaking in through shell companies. Their report points to Vietnam—Chinese gear went from controlling 54% of their market to 81% in under two years after they eased up on imports. Arvind Menon from GX put it bluntly: “If we don’t make sure these companies are actually adding value here, we’re basically inviting them to take over.” Scary thought.

What Other Countries Did Right (and Wrong)

Let me put it this way—Brazil got it right. They phased in local-content rules, and their telecom manufacturing grew by 37% since 2019. South Africa? Not so much. They went too soft on imports, and now European firms own 90% of their market. The lesson? Protectionism alone won’t cut it. You’ve gotta pair it with real investment in innovation. India’s PLI scheme is trying to do that, but we’ll see.

The Real Cost: Jobs and Geopolitics

This isn’t just about policy papers. A NITI Aayog study says a 10% rise in imports could cost 12,000 local jobs. And let’s not forget the China factor—after the 2020 Galwan mess, relying too much on imports from them feels like playing with fire. There’s this idea floating around about clustering manufacturers near tech hubs like Bengaluru—apparently, it could boost productivity by 14%. Makes sense, right? Keep everything close, cut the chaos.

What Everyone’s Saying

Domestic manufacturers like VVDN are all for this, calling it “about time.” But industry groups like COAI want safeguards. Lt. Gen. Dr. SP Kochhar’s got a point: “Don’t just check if the final product’s made here—look at the whole supply chain.” The DoT’s hinting at countermeasures, like slapping tariffs on imports if local sourcing dips below 40%. Smart move, but will it be enough?

How to Actually Make This Work

• Rewards for going local: Give bigger benefits to companies using over 50% Indian-made parts.
• No free rides: If foreign companies want in, make them share 5G tech with Indian partners.
• Keep ‘em honest: Quarterly audits to stop shell companies from gaming the system.

Bottom Line

This whole thing’s a tightrope walk. Easing rules could give our local manufacturers a much-needed boost, but if we don’t do it right, we’ll just end up more dependent on imports than ever. Menon’s warning hits hard: “Screw this up, and we’re trading quick wins for long-term pain.” With 5G rolling out fast, the government’s next steps will decide whether this becomes an Atmanirbhar Bharat win—or yet another “what not to do” case study for the world.

Source: Livemint – Companies