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Telecom Equipment Sector Can Hit $50 Billion in Exports by 2035, Says Niti Aayog

India’s telecom and network equipment sector has the potential to become a major driver of national economic growth and reach $50 billion in exports by 2035, according to a recent report released by Niti Aayog. However, the government think tank emphasised that significant structural hurdles—such as reliance on foreign components, low domestic value addition, and higher manufacturing costs—must be addressed to achieve this trajectory.

What Happened

A report published by Niti Aayog outlined the economic trajectory and persistent obstacles facing India’s telecom and network equipment (TANE) manufacturing sector. The report noted that with sustained policy backing, the sector could help double its contribution to gross domestic product (GDP), potentially lifting it to 1–1.5%, while generating 500,000 skilled jobs and aiding India’s broader target of reaching $1 trillion in total national exports by 2030 under the National Telecom Policy 2025 (NTP-25).

Currently, the trade balance in the sector remains tilted toward imports. Between 2020 and 2024, telecom and network equipment exports stood at $0.6 billion to $1 billion per year, making up merely 0.2% to 0.3% of the country’s total outbound shipments. Meanwhile, imports were recorded at $4 billion to $5 billion annually, accounting for 0.7% to 1.1% of all inbound shipments.

Key Highlights

  • Growth and Employment Projections: Continued policy intervention could expand the sector’s GDP contribution to 1–1.5%, generate 500,000 skilled jobs, and develop a $50 billion export base by 2035.
  • Critical Component Imports: More than 80% of critical equipment components, such as signal processors and 4G/5G antennas, are imported from China.
  • Global Supply Chain Exposure: Equipment manufacturing remains heavily fragmented internationally; an Indian 5G base station typically relies on chipsets from Taiwan, optical transceivers from Japan, and IP cores designed in the United States.
  • Cost Disadvantages: Indian manufacturers of generic equipment face up to a 26% fiscal disability compared to international competitors. This gap widens to 29% in categories where extended buyer’s credit is offered on imported goods.
  • Low Domestic Value Addition: Local manufacturing operations remain largely focused on basic assembly, resulting in domestic value addition that is frequently under 20%.

Why This Matters

The findings indicate that while India has strong long-term export aspirations under NTP-25—including a 150% boost in output and 50% import substitution—the domestic industry is currently constrained by international dependencies. Heavy reliance on single-country suppliers for essential inputs, combined with cost disadvantages and low domestic value capture, leaves the local supply chain exposed to external market shocks and limits domestic industrial margins.

What to Watch Next

The sector’s trajectory will rely on how policy initiatives evolve beyond the current Production Linked Incentive (PLI) scheme. Key developments to observe include government measures aimed at reducing the cost disabilities faced by local manufacturers, strategies to encourage higher-value component manufacturing locally, and progress toward meeting NTP-25’s manufacturing output and import reduction targets.

Frequently Asked Questions

What export milestone could India’s telecom equipment sector achieve by 2035?

According to Niti Aayog, continued supportive policy interventions could help India transform into a $50 billion telecom equipment export hub by 2035.

Where does India source most of its critical telecom components?

More than 80% of essential components, including signal processors and 4G/5G antennas, are currently imported from China, alongside specialised components sourced from Taiwan, Japan, and the United States.

What is the domestic value addition in India’s telecom equipment sector?

Manufacturing in the sector is predominantly centered around low-value assembly, which leaves domestic value addition below 20% in many cases.

What are the targets outlined under the National Telecom Policy 2025?

The National Telecom Policy 2025 (NTP-25) targets a 150% surge in manufacturing output, 50% import substitution, and contributes toward reaching $1 trillion in total exports by 2030.

Source: Times of India