New Delhi: The Department of Telecommunications (DoT) is considering a revision of its public procurement policy (PPP) aligned with the Preference to Make-in-India (MII) order issued in October 2024. This move aims to broaden the scope of eligible telecom products and potentially ease local sourcing requirements.
Under last year’s PPP-MII guidelines, the DoT mandated that 36 specified telecom products must meet a minimum of 50% local value addition to qualify for central government procurement. However, 5G-related products were notably excluded from this list. To maintain flexibility, the order included a provision allowing the department to periodically reassess the product list and sourcing criteria.
Now, through a recent notice seeking stakeholder feedback, the DoT proposes a comprehensive review of the October 21, 2024 PPP-MII order. Key areas under evaluation include:
- The current list of notified products
- Product-wise Local Content (LC) thresholds, including ceilings for design-based LC
- Definitions and qualifying inputs for LC, especially in software
- Methods for calculating LC for different product categories
Citing findings from NITI Aayog, TRAI, MAIT, and PLI scheme participants, the DoT acknowledged that India's limited electronic component ecosystem presents challenges in achieving 50–60% LC for many telecom products. As a result, the criteria for qualifying local content may need adjustment.
At present, products requiring over 50% LC include:
- Routers
- Ethernet switches
- Media gateways
- Customer Premises Equipment (CPE)
- GPON devices
- Satellite phones and terminals
- Optical fibre and cables
- Telecom batteries
To ensure authenticity, imported items procured through local resellers or distributors are excluded from LC calculations. Similarly, payments for royalties, overseas technical fees, and repackaged or refurbished goods are also not counted toward LC.
In public procurement, Class-I suppliers (with at least 50% LC) are given preference. If Class-I suppliers are unable to meet the demand, Class-II suppliers (with a minimum 20% LC) are considered. Companies manufacturing under the Production Linked Incentive (PLI) scheme for telecom equipment are categorized as Class-II suppliers.
The DoT’s notice emphasizes that any suggestions to include new products or remove existing ones must be backed by concrete, verifiable data—such as manufacturer lists, LC percentages, production volumes, sales data, and trade statistics.
Stakeholders have 30 days to submit their feedback.