India’s telecommunications and network equipment sector holds immense potential for rapid growth; however, heavy import dependence on China necessitates urgent policy support to boost domestic production and exports. According to a NITI Aayog report, such measures could double the sector’s contribution to the economy by 2035 and transform India into a $50 billion export hub.
The report highlights that while the telecommunications and network equipment sector forms the backbone of modern global communication systems, it currently faces a significant trade imbalance. Targeted policy interventions could enable the sector to play a pivotal role in achieving the universal connectivity and export-related goals outlined in the National Telecom Policy 2025.
Between 2020 and 2024, exports of telecommunications and network equipment from India accounted for merely 0.2–0.3 percent of total exports, with an annual value ranging from $600 million to $1 billion. In contrast, India’s annual imports in this sector stood at $4–5 billion, representing 0.7–1.1 percent of total imports.
The report notes that India relies on China for over 80 percent of its imports of critical equipment and components, such as 4G/5G antennas and signal processors.
The production of telecommunications equipment relies on global supply chains. For instance, a 5G base station manufactured in India might incorporate chipsets from Taiwan, optical transceivers from Japan, and technical designs developed in the US. Consequently, disruptions in supplies from any single country can impact Indian companies.
According to the report, Indian companies manufacturing standard telecommunications equipment face a financial disadvantage of up to 26 percent compared to global firms when producing high-value telecommunications products. For certain products—where import arrangements offer buyers extended credit facilities—this gap widens to 29 percent.
Equipment manufacturing in India remains largely confined to low-value assembly and finishing operations. Domestic value addition often remains below 20 percent. The government has taken several measures, including the Production-Linked Incentive (PLI) scheme, to boost this sector. According to NITI Aayog, sustained support could see the telecommunications and network equipment sector’s contribution to the economy reach 1–1.5 percent.
This could help generate approximately 5 lakh skilled jobs and transform India into a $50 billion telecom equipment export hub by 2035.
The report states that strong government intervention can play a pivotal role in boosting domestic production. This would facilitate achieving the targets set under the National Telecom Policy 2025—specifically, a 150 percent increase in production and a 50 percent reduction in imports.
