South Korea's Samsung, which had a blockbuster run under India's smartphone incentives scheme, has dropped out of a similar scheme to build telecom gear, government data showed. The ₹12,195 crore production-linked incentive (PLI) scheme was introduced in February 2021 to encourage the local manufacture of equipment such as network switches, transmission gear and set-top boxes.
Out of the scheme's 42 applicants, 19 including Samsung have not claimed or received any incentive, data showed. Only 15% of the scheme's outlay was actually disbursed, even as its five-year run ends this month.
Companies which have chosen FY23 as base year will have one year left (FY27) to claim incentives on incremental sales, whereas investments under the scheme were only allowed till FY26 for all the scheme participants.
Samsung India Electronics, which applied for the scheme in 2022, chose to withdraw because it found local manufacturing unviable given limited customer demand for its telecom gear, an industry expert said. The company had set an investment target of ₹168 crore till FY25 for local manufacturing, but it did not make such investments to start production. Given the limited demand, the company found imports more viable, the person said on the condition of anonymity.
To be sure, Samsung, Nokia and Ericsson have contracts to supply 4G/5G radio and network infrastructure to telecom operators such as Bharti Airtel, Reliance Jio and Vodafone Idea in the country.
In sharp contrast, Samsung had topped India’s smartphone PLI scheme for making phones locally, earning over ₹1,000 crore in incentives during a five-year period. The company leaned hard on its Noida facility to pump out millions of smartphones during the period, making it the Indian export hub for the Korean giant.
Samsung and the Department of Telecommunications (DoT) did not respond to emailed queries.
To be sure, Samsung, along with device manufacturer Panache Digilife, did not invest, whereas 14 other companies made some investments but missed the targets under the scheme, government data showed. Samsung, however, was the only company to withdraw from the scheme.
“Sixteen companies missed their investment targets. This is primarily due to the nature of the telecom equipment market, which is predominantly business-to-business (B2B) with only a few service providers as major buyers,” Pemmasani Chandra Sekhar, minister of state for communications said in reply to a parliament question on 29 January.
“Procurement decisions by service providers are based on commercial and technical considerations. Some PLI beneficiary companies were unable to secure adequate supply orders and, therefore, did not undertake the planned investments for creation of manufacturing capacity,” the minister added.
Other companies which gave the scheme a miss include Netweb Technologies India, Kaynes International Design & Manufacturing, and state-run ITI Ltd. On 23 May 2025, Mint, citing a right to information (RTI) request, had reported that only half of the selected companies under the PLI scheme had claimed incentives. Kaynes, and ITI did not respond to queries.
Lohit Chhabra, manager and company secretary at Netweb Technologies said in response to Mint’s emailed queries, “We are already a beneficiary under the IT Hardware PLI scheme. Given the strong growth momentum in this segment, we have consciously prioritised it and are optimising both capital allocation and execution bandwidth to support this scale‑up. Consequently, we have chosen not to pursue the telecom segment aggressively at this stage.”
“With respect to the IT Hardware PLI, we have undertaken all the required investments and have been successfully availing the incentives associated with the scheme,” Chhabra added.
For HFCL, which invested ₹419 crore between FY23 and FY26, weak sales prevented it from making the most out of the PLI scheme. According to government data, the company had sales of ₹618 crore in the last two years. This is in contrast to ₹2,197 crore target in FY25 and ₹3,959 crore sales target in FY26. For all the previous years, the company did not book any sales under the scheme.
The total incentives claimed by 23 companies is ₹1,984 crore as of November end. Of this, ₹1,850 crore, or 15% of the scheme's outlay, has been paid out.
“A lot of the larger companies projected higher capex and revenue targets over the course of the scheme and owing to lack of orders they could not meet their targets,” said Paritosh Prajapati, chief executive officer and founder of Sweden-based GX Group. The company is manufacturing routers, switches and other telecom equipment under the scheme in India and has received incentives of ₹21 crore.
According to Prajapati, the government should come up with a new PLI scheme and should do away with the requirement for companies to share their capex and revenue projections of the five years. “Any evaluation and projection for capex and revenue should be on an yearly basis,” he said, adding that the next phase should focus on building value addition in the telecom equipment phase and how the exports can be improved.”
Despite the weak disbursements, the government has termed the telecom PLI scheme successful one, given the record of companies such as Tejas Networks, Nokia Solutions and Networks India, Jabil Circuit India (contract manufactures for Ericsson and Apple), Flextronics Technologies (India).
Until 31 December, the scheme's beneficiaries had invested a total of ₹5,094 crore, generated over ₹1.03 trillion sales, ₹21,900 crore exports and created 29,661 jobs, according to the scheme's dashboard.
Tejas Networks invested about ₹1,455 crore and received incentives worth ₹553 crore, whereas Jabil invested about ₹610 crore and received incentives of ₹236 crore. Tejas, a Tata group company, powered ahead as it gained largely from BSNL's 4G rollout order.
The scheme had offered incentives of 4-7% on incremental sales. For MSMEs, an extra 1% incentive was offered in the first three years.
In June 2022, the government amended the scheme to facilitate design-led manufacturing with an additional incentive of 1% beyond existing incentive rates. A sum of ₹4,000 crore from the ₹12,195 crore was set aside for the same.
Companies approved under the scheme were allowed to choose a period of five consecutive years, either from FY22 to FY26, or FY23 to FY27, to achieve the net incremental sales for the incentive claim. Investments, however, are allowed till FY25 or FY26, depending on the base year chosen by the companies.