India’s telecom manufacturing challenge is no longer just to build more equipment: it is to own more of the design, components, radio systems and intellectual property inside it. Moving up that value chain could improve domestic value capture and supply resilience, but the available figures point to a substantial gap between assembly and deeper localisation—and key policy support is still under consideration.
What “beyond assembly” means for telecom
Telecom and network equipment includes radio access network (RAN) gear, routers and switches, optical-fibre infrastructure, microwave apparatus and related network systems. Assembly can put finished equipment together domestically while leaving many of its components, designs and technologies dependent on external suppliers. A deeper manufacturing strategy aims to develop those capabilities locally as well.
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Business Standard’s 11 October 2026 article, citing an unidentified KPMG report, says critical deep-technology layers are “more than 70 per cent import-dependent.” The underlying KPMG report, its scope and methodology were not identified, so that figure should be read as Business Standard’s account of KPMG—not as an independently verified measure of all Indian telecom imports.
Where the localisation gap shows up
A NITI Aayog sector-analysis search-result extract reports Department of Telecommunications figures labelled “localization overall” for selected equipment categories. The available extract does not establish the table’s publication year or full context; these percentages should not be read as the import share of all telecom technology or as a current measure of every product in each category.
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| Equipment category | Overall localisation reported |
|---|---|
| 4G/LTE RAN base stations | 4% (Department of Telecommunications figures, as reported in a NITI Aayog extract; year not confirmed) |
| 5G RAN base stations | 5% (Department of Telecommunications figures, as reported in a NITI Aayog extract; year not confirmed) |
| Switches | 3% (Department of Telecommunications figures, as reported in a NITI Aayog extract; year not confirmed) |
| GPON ONTs | 12% (Department of Telecommunications figures, as reported in a NITI Aayog extract; year not confirmed) |
| Wi-Fi access points/controllers | 5% (Department of Telecommunications figures, as reported in a NITI Aayog extract; year not confirmed) |
| Internet set-top boxes | 5% (Department of Telecommunications figures, as reported in a NITI Aayog extract; year not confirmed) |
The table covers selected equipment, not every layer of the telecom stack. Still, the low reported localisation for RAN base stations and switches helps explain why scaling assembly alone would not amount to broad domestic technology ownership.
What a deeper domestic ecosystem needs
The NITI Aayog extract frames telecom and network equipment as a strategic manufacturing sector. Its recommendations point beyond final assembly toward a wider set of capabilities:
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- Components and subassemblies: expand the local supplier base so equipment makers can source more of what goes into finished network products domestically.
- Design and intellectual property: build the engineering and product-development capacity to create technology, not only manufacture to someone else’s specification.
- Research and skills: strengthen R&D and workforce capability for emerging telecom technologies.
- Testing and certification: develop the processes and facilities needed to qualify equipment for network deployment.
- Exports and customers: orient production toward export markets and durable demand, rather than relying on assembly volume alone.
- Capital and supply resilience: enable companies to finance production and manage disruptions in global component supply.
These elements reinforce one another: component makers need predictable customers, equipment developers need testing pathways, and all of them need engineering talent and capital to reach production scale.
Policy goals are ambitious; the successor incentive remains a proposal
National Telecom Policy 2025 targets
A NITI Aayog extract describes National Telecom Policy 2025 ambitions for 2030: double telecom’s contribution to GDP and its product and service exports, double R&D spending on emerging telecom technologies, and create one million new jobs. These are policy targets, not reported outcomes.
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Successor telecom PLI proposal
Mint reported on 6 October 2026 that the Department of Telecommunications had submitted a proposed successor to the telecom production-linked incentive scheme and that the Union finance ministry was reviewing it. The reported proposal would focus more on component manufacturing than the existing scheme. Mint said it could have an outlay of ₹6,000–7,000 crore over five years, with proposed targets of 9,000 direct jobs, ₹3 trillion in sales and ₹1.5 trillion in additional exports. Those figures describe an unapproved proposal, not an authorised scheme or guaranteed results.
The policy question is therefore not simply how much incentive funding is offered, but whether support helps firms develop local components, technology and exportable products that can compete beyond the incentive period.
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Why execution is difficult for smaller suppliers
Rakesh Bhatnagar, director general of the industry association VoICE, told Mint that some firms that struggled to meet existing scheme targets were MSMEs facing semiconductor shortages and the working-capital burden of buffering supply shocks. That is an industry-association executive’s assessment, rather than an official evaluation, but it highlights a practical challenge: smaller manufacturers may need to pay for inputs well before they receive payment for completed production.
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For a component-focused programme to build lasting capacity, access to finance and reliable supply chains matter alongside production incentives. Companies also need a route to certification and customer orders; otherwise, new capacity may not translate into viable domestic suppliers.
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BSNL’s indigenous stack shows what deployment can look like
Tata Group says TCS, C-DOT and Tejas Networks collaborated to design and develop an indigenous telecom stack for BSNL. In the company’s account, Tejas supplied the baseband and radio units for BSNL’s pan-India deployment. The example shows domestic stack development and deployment are possible, but it does not establish that every component or technology in the supply chain is Indian-made.
How to judge whether India is moving up the value chain
Progress should be measured by the capabilities and commercial outcomes built in India, not only by the number of finished units assembled. Useful indicators include:
- Local sourcing of components and subassemblies, measured with clear product definitions and a stated time period.
- Domestic design ownership, patents or other intellectual property, and spending on telecom R&D.
- Equipment that passes testing and certification and is purchased for real network deployments.
- Supplier resilience, including the ability of smaller firms to finance production and withstand component shortages.
- Exports and repeat commercial demand that continue beyond temporary incentive support.
India’s telecom push is a shift in ambition from manufacturing more equipment to capturing more of the technology and value within it. The localisation figures, policy targets and BSNL example each illuminate part of that transition; none alone proves that the broader shift has been completed.
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