1 min read.Updated: 07 Apr 2021, 12:16 PM ISTIshita Guha
India, which imports 85% of its wireless telecom equipment, is currently preparing to roll out 5G services that will require telecom operators to make heavy investments in network infrastructure
NEW DELHI: Bharti Enterprises Ltd and consumer durable manufacturer Dixon Technologies (India) Ltd have inked a pact to form a joint venture for availing the government’s production-linked incentive (PLI) on manufacturing of telecom and networking products, according to a company statement.
Dixon’s wholly-owned subsidiary Dixon Electro Appliances Pvt Ltd or any firm identified by the two parties will be the joint venture entity. The new firm will manufacture telecom and networking products such as modems, routers, set top boxes, internet-of-things (IoT) devices, among others, for the telecom sector, including Bharti Enterprises’ subsidiary and operator Bharti Airtel Ltd.
“The said joint venture will file necessary applications with the ministry of communications or any other nodal agency to avail benefits under the PLI scheme of the government," said Dixon Technologies in the statement on Wednesday.
Once the transaction is completed, Dixon will hold 74% in the joint venture, and 26% will be owned by Sunil Mittal-led Bharti Enterprises.
“We are pleased to join hands with Dixon group to strengthen India’s electronics manufacturing sector and to contribute to government’s vision of an Atmanirbhar Bharat. With Dixon’s excellent track record in manufacturing industry and Bharti’s deep expertise in telecom, this venture will be well positioned to be a key player in its space," said Deven Khanna, group director, Bharti Enterprises.
In February, the Union cabinet approved incentives worth Rs12,195 crore for domestic manufacturing of telecom and networking equipment, seeking to cut the country’s massive dependence on imports of such gear.
The PLI scheme will reduce India’s imports of telecom equipment worth over Rs50,000 crore, communications, electronics and information technology minister Ravi Shankar Prasad had told reporters after the Cabinet's decision.
“We see them as our ideal long-term strategic partner who share our core values: focus on quality, engineering prowess, innovation and customer satisfaction and we intend to leverage each other’s strengths to manufacture telecom and networking products," said Saurabh Gupta, chief financial officer, Dixon Technologies.
India, which imports 85% of its wireless telecom equipment, is currently preparing to roll out 5G services that will require telecom operators to make heavy investments in network infrastructure. The incentives, along with local demand, are expected to attract foreign companies to set up manufacturing units in India.