The telecom department is examining a proposal from the National Manufacturing Competitiveness Council, at the instance of the Prime Minister's Office, to float a $1 billion (about Rs 6,000 crore) government-sponsored fund to seed 'Made in India' technologies to boost local gear manufacturing.
The proposed telecom manufacturing fund will "infuse equity in start-ups promoted by technocrats and scientists of Indian origin on condition that product development and manufacturing happens in India," says a note forwarded by the PMO to the telecom department, a copy of which was reviewed by ET.
Once promoters of telecom start-ups commit that development and manufacturing will happen in India, the fund will bear full costs through equity infusion. It will retain majority ownership and be the final authority for clearing all proposals related to a potential transfer of management control, measures aimed at ensuring that promising telecom start-ups don't get acquired midstream by multinational firms.
The fund will "maintain over 51% stake to ensure a strong telecom start-up isn't acquired by an MNC and prevented from reaching its full potential in India,"the note says. The National Manufacturing Competitiveness Council has suggested in a communique to the PMO that the "government commit at least a billion dollars to support the development of disruptive technologies towards telecom equipment manufacturing in India".
The council was established nearly a decade ago by the Centre to recommend policies to recharge and sustain growth of manufacturing industries across sectors. The PMO has sought the telecom department's feedback on the proposed fund since the previous government's plans to float multiple central funds to support local telecom product development, and research and development, have not seen the light of day.
The thrust on local telecom equipment manufacturing is also at the heart of the Narendra Modi-led government's Digital India project, which aims to deliver citizen services to the common man electronically and completely replace imported electronics with locally manufactured ones.
Significantly, India's preferential market access (PMA) policy, which mandates a minimum 30% local sourcing of telecom gear in its bid to boost local manufacturing, only applies to government contracts and does not extend to private telecom operators or global telecom network vendors.
Micromax mobiles, on Monday launched the Canvas Nitro A310 Android smartphone in India for Rs. 12,900. Micromax has partnered with Snapdeal for the exclusive availability of this device.