India’s telecommunications sector has become a global magnet for foreign investments, leveraging its low data tariffs and rapid adoption of 5G technology to attract international attention. With the world’s most affordable internet rates, India is positioning itself as a hub for foreign companies in sectors like ride-hailing, telemedicine, digital payments, and online education.
- Number of subscribers: As of September 2024, India has over 1.19 billion telecom subscribers, making it the second largest telecommunication network in the world.
- Telecom companies: Some of the major telecom companies in India include Jio, Airtel, BSNL, Tata Teleservices, and Vi.
Government’s Proactive Strategy
The Prime Minister’s Office has tasked the Department of Telecommunications to collaborate with the Ministry of External Affairs and the Department for Promotion of Industry and Internal Trade. Their collective goal is to market India’s low data rates and expanding 5G infrastructure as a key incentive for foreign investors.
The government’s efforts to enhance the telecom sector’s global appeal include:
- Call tariffs: India has some of the lowest call tariffs in the world, due to the high level of competition between its large-scale telecom operators.
- Production Linked Incentive (PLI) Scheme: With an investment of ₹121.95 billion, this initiative promotes domestic manufacturing of telecom equipment, attracting substantial FDI over the last five years.
- Telecommunication Act, 2023: This new legislation simplifies licensing, standardizes Right of Way (RoW) rules, and accelerates 5G deployment, creating a more business-friendly environment for foreign players.
- Satellite Communications: Opening the satellite communications sector to private players is another significant reform aimed at driving FDI.
- Telecom equipment manufacturing: India’s telecom equipment manufacturing industry has grown in recent years, and is moving towards becoming a global hub.
India’s telecom sector, the fourth-largest recipient of FDI globally, has drawn $39.996 billion in investments since April 2000. While FDI in FY 2023-24 stood at $282 million, the government expects a revival, particularly with policies designed to make India an attractive investment destination.
The focus on affordable internet, extensive 5G adoption, and streamlined policies positions India as a strong contender for increased foreign investments. As the country continues to innovate and expand its digital infrastructure, the telecom sector is expected to witness robust growth in the coming years, further strengthening its global standing.
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