Contribution to Economy: Manufacturing Telecom and Networking Products in India
India’s telecom and networking sector has made crucial contributions to the country’s economy over the years, and the sector has consistently grown and contributed significantly to the country’s overall development.
One of the main reasons for the growth of the telecom and networking sector in India is the increasing demand for internet and mobile services. With the proliferation of smartphones and the availability of low-cost data plans, more and more people in India are using the internet to access information, communicate with others, and conduct business. This has led to a significant increase in internet users in the country.
In addition to the growth in internet usage, the telecom and networking sector has also benefited from adopting new technologies, such as 4G (and upcoming 5G) and the Internet of Things (IoT). These technologies are expected to drive further growth in the sector and enable the development of new products and services.
India’s telecom and networking sector has also been supported by the government’s liberalization of the telecom and networking industry. The government has implemented policies and regulations to promote competition and encourage investment in the sector, which has helped to drive innovation and growth. One such initaive is Production Linked Incentive (PLI) scheme where the telecom and networking industry in India has been identified as a priority sector.
One of the main objectives of the PLI scheme in the telecom and networking industry is to increase the domestic production of telecom equipment, including mobile phones, base stations, switches, and other infrastructure equipment. The scheme aims to encourage companies to invest in research and development and increase the level of domestic value addition in the sector.
The PLI scheme has also been designed to support the export of telecom equipment and services from India. The scheme aims to encourage companies to increase their exports and diversify their markets, focusing on emerging markets.
Market demand and supply
The demand for advanced communication technologies and services in India has been steadily increasing in recent years, driven by factors such as population growth, urbanization, and increasing disposable incomes.
According to data from the Ministry of Communications and Information Technology of India, the total number of telecom subscribers in India has increased from around 1 billion in December 2017 to around 1.2 billion in December 2020. The demand for mobile phones, in particular, has been vital in India, with the total number of mobile phone subscribers increasing from around 1 billion in December 2017 to around 1.1 billion in December 2020.
The supply of telecom and networking products and services in India has also increased in recent years to meet the growing demand. India’s telecom and networking industry is a diverse sector that includes a range of companies, from large multinational corporations to small and medium-sized enterprises (SMEs). It is also a constantly evolving sector, with new technologies and business models emerging all the time.
GDP/GVA-Added
According to data from the Telecom Regulatory Authority of India (TRAI), the sector contributed 6.5% to India’s Gross Domestic Product (GDP) in 2018-19 and 6.3% to the country’s Gross Value Added (GVA) in the same period.
India’s telecom and networking sector has consistently grown over the past few years, driven by the increasing demand for internet and mobile services, the adoption of new technologies, and the government’s liberalization of the telecom and networking industry. According to data from the Ministry of Electronics and Information Technology, as of December 2020, there were over 1.2 billion mobile subscribers in India, and the country had over 634 million internet users.
In addition to its direct contributions to the economy, the telecom and networking sector also significantly drives economic growth in other sectors. For example, the growth of e-commerce, online education, and other digital services have been facilitated by the expansion of the telecom and networking sector.
Trade – Imports and Exports
According to data from the Ministry of Commerce and Industry of India, the telecom and networking industry in India has seen steady growth in both imports and exports in recent years.
In 2020-2021 (April-March), India’s total value of imports in the telecom and networking sector was around INR 597,742 crore (approximately USD 81.6 billion). This was a slight decrease from the previous year when the total value of imports in the telecom and networking sector was around INR 635,061 crore (approximately USD 86.8 billion).
The major countries from which India imports telecom products and services include China, the United States, South Korea, and Sweden. In 2020-2021, the top three countries from which India imported telecom and networking products and services were China, the United States, and South Korea, which together accounted for around 65% of India’s total telecom and networking imports.
On the export side, India’s telecom and networking industry has also seen steady growth in recent years. In 2020-2021, India’s total value of exports from the telecom and networking sector was around INR 1,557 crore (approximately USD 210 million). This increased from the previous year when the total value of telecom and networking sector exports was around INR 1,287 crore (approximately USD 176 million).
The major countries to which India exports telecom products and services include the United States, the United Arab Emirates, and Singapore. In 2020-2021, the top three countries to which India exported telecom and networking products and services were the United States, the United Arab Emirates, and Singapore, which together accounted for around 80% of India’s total telecom and networking exports.
Overall, India’s telecom and networking industry has seen steady growth in imports and exports in recent years, focusing on a range of products and services, including telecom and networking equipment, software, and other related products and services. It is a significant contributor to the country’s international trade and is expected to continue to play a crucial role in the coming years.
Employment
India’s telecom and networking industry is a significant contributor to employment in the country, with a large and growing workforce, with over 2.7 million people directly or indirectly employed in the sector as of 2018-19, according to data from the Department of Telecommunications.
According to data from the Ministry of Communications and Information Technology of India, the telecom and networking sector in India employs around 4.3 million people as of 2020.
Regarding employment, India’s telecom and networking sector is dominated by the telecommunications subsector, which employs around 3.5 million people. The remaining 0.8 million employees work in the networking and internet services subsector.
Anurag Dhole
Anurag Dhole is a Research Intern at Tatvita. Presently he is pursuing his bachelors in the Liberal Arts department at the Savitribai Phule Pune University.
