New Delhi: India's telecom and network equipment (TANE) sector has significant growth potential but requires urgent policy support to reduce import dependence, strengthen domestic manufacturing and expand exports, according to a NITI Aayog report.
The report said stronger support could help raise the sector's contribution to India's GDP to 1-1.5 per cent, create 500,000 skilled jobs and position the country as a $50 billion telecom and network equipment export hub by 2035.
The TANE ecosystem forms the backbone of modern global connectivity. However, the sector faces significant trade imbalances and remains heavily dependent on imports, particularly from China.
According to the report, India's telecom and network equipment exports accounted for only 0.2-0.3 per cent of total exports, or $0.6-1 billion annually between 2020 and 2024. Imports, meanwhile, stood at $4-5 billion a year, equivalent to 0.7-1.1 per cent of total imports.
More than 80 per cent of imports for critical components, including 4G and 5G antennas and signal processors, are sourced from China, the report said.
NITI Aayog noted that telecom equipment manufacturing depends on globally interconnected supply chains, with different regions specialising in key components. For example, an Indian 5G base station may integrate Taiwanese chipsets, Japanese optical transceivers and US-designed intellectual property cores.
Such dependence leaves the sector vulnerable to disruptions in individual markets.
The report also highlighted the cost disadvantages faced by Indian manufacturers. Companies producing generic telecom and network equipment face up to 26 per cent higher fiscal disability compared with global peers in high-value-added telecom manufacturing.
The disadvantage rises to 29 per cent in product categories where buyers can access extended credit for imported equipment, it said.
Domestic manufacturing also remains concentrated in low-value assembly, with domestic value addition often below 20 per cent.
The government has introduced measures including the Production Linked Incentive scheme to support telecom and network equipment manufacturing.
NITI Aayog said continued supportive measures could help the sector increase its contribution to GDP to 1-1.5 per cent, generate 500,000 skilled jobs and build a $50 billion export hub by 2035.
The report said this could help India turn existing supply-chain vulnerabilities into an opportunity for global leadership in telecom equipment.
"Robust government intervention will go a long way in catalysing domestic manufacturing, aligning with NTP25's 150 per cent output surge and 50 per cent import substitution goals," the report said.
The report also linked the sector's growth potential to the goals of the National Telecom Policy 2025, including universal connectivity, a higher contribution to GDP and India's broader ambition to expand exports.