The Department of Telecommunications (DoT) introduces new rules requiring 50% local content for 36 key telecom products.
He Department of Telecommunications The Department for Transport has announced new rules aimed at promoting local manufacturing in the telecoms sector. This recent notification indicates that 36 key telecom products will now require a minimum local content of 50% or more for public procurement. This move is part of a broader “action plan”.Made in India“initiative designed to boost domestic production and reduce dependence on imports.
What is required?
The new rules state that products procured by central government entities, state-owned enterprises, local bodies and projects funded by the Universal Service Obligation Fund (USOF) must comply with these local content requirements. This includes any procurement made by government offices, autonomous bodies and state or local governments under central programmes funded by the Indian government. Notably, the rules also apply to goods and services funded by the USOF.
The DOT notification specifically excludes imported items purchased from resellers and distributors from the local content calculation. Additionally, royalties, technical expenses paid abroad, and repackaged or reconditioned products will not be considered local content under these new rules.
Affected products
Among the 36 products affected by this new policy are essential telecom equipment such as routers, Ethernet switches, media gateways, customer premises equipment and IP-based communication systems. Other items included in the list are Gigabit Passive Optical Network (GPON) equipment, IP audio and video phones and satellite phones, among others. For some of these products, the required local content is set at 50%, while for others it will be 65%.
Supporting local manufacturers
The Department of Transportation is prioritizing Class I suppliers, which must have at least 50% local content. If a Class I supplier is unable to fulfill an order, a Class II supplier with at least 20% local content may be considered. In particular, manufacturers participating in the Production Linked Incentive (PLI) program for telecommunications products will be classified as Class II suppliers.
To further support local technologies, the DoT has introduced the option to include proofs of concept in tenders and requests for proposals. This allows suppliers to demonstrate their capabilities and innovations as an alternative to the traditional qualification experience, where applicable.
What does this mean?
These new rules are expected to significantly improve local manufacturing capacity in the telecom sector, boost competition and reduce dependence on foreign suppliers. By focusing on domestic production, the government aims to boost economic growth and innovation in India’s technology industry.
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