India’s local sourcing rules to exclude 5G equipment

The Indian government has introduced draft guidelines mandating over 50% local value addition for 36 telecom products in government procurement. That initiative aims to bolster domestic manufacturing and stimulate innovation within the sector. The guidelines seek to develop a robust local ecosystem and encourage the growth of indigenous technology solutions by prioritising products such as routers, optical fibre, and satellite phones.

However, the Indian government’s decision to exclude 5G equipment from the list of products requiring local sourcing has raised concerns among industry stakeholders. While the new rules are broadly welcomed, the omission of 5G gear is seen as a potential impediment to India’s ambitions in global telecom markets. The exclusion could affect the development and export potential of Indian 5G solutions, creating uncertainty about how the industry will meet domestic and international demands.

The Indian government has recently tightened policy measures by excluding imported items from local content calculations. This adjustment, along with excluding royalties, technical charges, and repackaged goods, aims to ensure that only genuinely locally produced items are considered in procurement processes. These changes are part of a broader effort to strengthen the ‘Make in India‘ initiative and enhance the competitiveness of domestic manufacturers, supporting startups and established companies in developing and producing telecom equipment domestically.