India’s telecom and network equipment sector could soon emerge as a major contributor to the country’s GDP, but it still has some connecting to do.The telecom and network equipment sector could play a bigger role in India’s economy, helping double its GDP contribution and achieve $1 trillion in exports by 2030 under the National Telecom Policy 2025 (NTP-25), a Niti Aayog report said.However, the sector continues to face challenges, including heavy import dependence, low domestic value addition and higher costs for local manufacturers.Telecom and network equipment exports accounted for just 0.2-0.3% of India’s total exports between 2020 and 2024, at $0.6-1 billion annually. In contrast, imports stood at $4-5 billion a year, accounting for 0.7-1.1% of total imports.More than 80% of critical components, including 4G/5G antennas and signal processors, are sourced from China, the report highlighted.
Supply chain vulnerabilities
The sector’s supply chain is also spread across several countries, with different regions specialising in key components. An Indian 5G base station, for instance, may combine Taiwanese chipsets, Japanese optical transceivers and US-designed IP cores. This makes the industry vulnerable to disruptions in any one market.At the domestic level, Indian companies producing generic TANE equipment face up to 26% higher fiscal disability than their global peers in high-value-added telecom manufacturing.“the disability rises to 29% in product categories where buyer’s credit is available against imports for an extended period,” the report said.The report also pointed to the nature of domestic manufacturing, which remains concentrated in low-value assembly, with domestic value addition often below 20%.
Policy support
The government has introduced measures such as the Production Linked Incentive scheme to support the sector. Niti Aayog said continued supportive measures could raise telecom and network equipment’s contribution to GDP to 1-1.5%, create 500,000 skilled jobs and help India emerge as a $50 billion export hub by 2035.The report said these measures could help turn the sector’s existing vulnerabilities into a platform for global leadership.“Robust government intervention will go a long way in catalysing domestic manufacturing, aligning with NTP25’s 150% output surge and 50% import substitution goals,” the report stated.
