Dixon, HFCL, VVDN among 14 firms committing ₹3,500 cr for telecom manufacturing hub in Gwalior

Electronics and telecom gear makers such as HFCL Ltd, Dixon Technologies (India) Ltd, VVDN Technologies, among over 14 companies have committed a total investment of ₹3,500 crore for India’s first telecom manufacturing zone in Gwalior in Madhya Pradesh, the Centre said on Thursday.

The manufacturing zone, which is being set up as a joint venture between the Centre and the Madhya Pradesh government, is being positioned as a centralized hub to design, manufacture, and test telecommunications equipment locally. A special purpose vehicle with a 51% stake of state government and 49% equity of the Centre will be formed soon.

The Centre has committed an investment of ₹493 crore to set up the infrastructure with more than half of the outlay going towards setting testing and lab ecosystem. With the outlay, the Centre also plans to establish internal infrastructure of the manufacturing zone followed by technology centre and costs on marketing to attract companies.

“By bringing the entire telecom value chain under one roof from R&D and design to testing and production, the project will significantly enhance India's global competitiveness in the telecom sector,” communications minister Jyotiraditya Scindia said, adding that the project will generate 14,000 jobs.

The Madhya Pradesh government on the other hand has allotted 170 acre land initially for the zone with local incentives, including providing 50% capital support, maximum ₹200 crore to the companies who set up their production facilities. An R&D support of up to ₹25 crore to the companies, as well as land at ₹1 per sq. meter annual lease for 30 years, are some of the key sops.

Further, the state government will offer power tariff rebate of ₹2 per unit to the companies, followed by subsidized water charges.

At an investor roundtable with the state and central governments , industry executives lauded the plan.

“It is a very heartening investment. Dixon is tentatively looking to invest around ₹200 crore with expected employment of 1200 people,” Atul Lall, vice chairman and managing director of Dixon Technologies said.

Dixon will focus on telecom consumer premise equipment (CPE) products, network equipment,and telecom components, Lall said, adding that the company will also evaluate optical transceivers that will support data centres.

To be sure, Dixon through its subsidiary Dixon Electroconnect announced a joint venture with Taiwan’s Gemtek Technology on making optical transceivers and telecom components.

Telecom gear maker HFCL announced a ₹700-crore investment for the phase 1 of the project and said it will be setting up an optical connectivity solutions factory.

Mahendra Nahata, managing director of HFCL, said the factory will employ at least 750 people and 80% of the manufacturing will be for exports.

Nahata, however, raised the issue with the state government representatives including Madhya Pradesh chief minister Mohan Yadav that the land should be allowed for keeping as collateral security with banks for loan purposes. To this, the state government representatives have given assurances.

The Centre has set a long-term goal to attract up to ₹10,000 crore in total investments to the zone. The Madhya Pradesh government said, for a total investment of ₹12,000 crore, the state will provide an incentive outlay of nearly ₹8,000 crore over 10 years.

Local software and electronics maker VVDN Technologies said it plans to establish a state-of-the-art R&D and design facility to create next gen products in 5G, 6G and satellite communications. The company employs over 5,000 engineers.

Vivek Bansal, founder and president of VVDN, said the company has committed ₹500 crore in the new manufacturing zone and expects to generate 5,000 jobs.

Other companies such as Syrma SGS and Sparsh CCTV have committed investments of ₹250 crore and ₹300 crore, respectively, to the government.