India’s Telecom Push: Beyond Assembly to Deep Tech

India’s telecom sector is moving beyond simple assembly and manufacturing to focus on deep technology, including 5G/6G research, semiconductor design, and intellectual property creation. This shift is driven by government incentives, a large engineering talent pool, and a growing domestic market. The result is a more self-reliant and innovative telecom ecosystem that is beginning to export technology rather than just devices.

Background: From Import to Innovation

For decades, India’s telecom manufacturing was largely limited to assembling imported components. Phones and network gear were designed elsewhere, with Indian factories performing final assembly. This began to change in the mid-2010s with the “Make in India” initiative, which used tariffs and production-linked incentives (PLI) to attract global manufacturers. While this successfully boosted local assembly, the next logical step was to develop indigenous technology—chips, software, and standards—that could compete globally.

The current push is about moving up the value chain. Instead of just screwing together parts, Indian companies are now designing their own 5G radio equipment, developing telecom software stacks, and filing patents for new network architectures. Government-funded research projects, like the Telecom Centres of Excellence (TCOEs) and the Centre for Development of Telematics (C-DOT), are actively working on next-generation technologies.

Key Drivers of the Deep Tech Shift

Several factors are accelerating this transition from assembly to deep technology:

• Government PLI Schemes: The production-linked incentive scheme for telecom and networking products now includes financial incentives for designing and manufacturing components locally, not just final assembly.
• 5G and 6G Research: India has launched a national 6G mission, with a goal to develop and deploy 6G technology by 2030. This requires deep research in areas like AI-native networks, terahertz communication, and advanced antenna systems.
• Semiconductor Push: The India Semiconductor Mission (ISM) is offering incentives for chip design and fabrication. Telecom equipment is a major consumer of semiconductors, so this aligns with the deep tech goal.
• Local Standards Development: India is working on its own telecom standards, such as the 5G standard developed by C-DOT, which can be adopted globally. This reduces royalty payments and creates a unique selling point.
• Engineering Talent Pool: India produces a large number of engineers and software developers each year, providing a strong workforce for R&D activities.

How It Works: The Technology Stack

Moving to deep tech means controlling the core of the network. In telecom, this involves several layers:

1. Radio Access Network (RAN): The base stations and antennas that connect phones to the network. Indian companies like Tejas Networks and HFCL are now designing their own 5G RAN solutions, including the software-defined radio and beamforming algorithms.
2. Core Network: The central part of the network that handles data routing, authentication, and billing. This is now being built on cloud-native architectures using open-source software (e.g., OpenRAN). Indian startups are developing these virtualized core functions.
3. Chips and Semiconductors: Telecom gear requires specialized chips for signal processing, power management, and security. India is designing these chips locally, with companies like Saankhya Labs and VVDN Technologies working on 5G and satellite chips.
4. Software and Algorithms: The intelligence of the network lies in software—from spectrum management to traffic optimization. Indian firms are developing AI/ML algorithms to make networks self-optimizing.

Common Problems and Misconceptions

One common misconception is that deep tech means inventing everything from scratch. In reality, it often involves building on open standards and leveraging existing research. Another problem is the high cost of R&D and the long gestation period before products become profitable. Many Indian companies are tackling this by focusing on niche areas like network security or IoT connectivity, where they can quickly commercialize their products.

Another challenge is the lack of a robust domestic semiconductor fabrication plant. While chip design is happening in India, the actual manufacturing still occurs abroad. However, the ISM is trying to attract fabs to India, and until then, companies can design and test chips locally before sending them to foundries.

How to Choose: Deep Tech vs. Assembly

For a company or investor, the choice between assembly and deep tech depends on the goal:

• Quick Market Entry: If you want to enter the market fast, assembly is easier and cheaper. You can import components and assemble them locally, benefiting from lower labor costs and government incentives.
• Long-term Value: If you aim for long-term growth and higher margins, deep tech is the path. It requires more investment in R&D but leads to proprietary products that can be sold globally.
• Risk Tolerance: Assembly has lower technical risk, but deep tech has higher potential rewards. A balanced approach is to start with assembly and gradually invest in R&D to build your own IP.

Costs and Investment

The cost of developing telecom technology is significant. For example, designing a 5G chip can cost tens of millions of dollars and take several years. However, the Indian government’s PLI scheme covers up to 20% of incremental sales for telecom products, which helps offset some costs. Additionally, private equity and venture capital are flowing into Indian telecom startups. For instance, in 2023, the Indian telecom startup ecosystem raised over $500 million, with a significant portion going to deep tech firms.

Compared to assembly, where the primary cost is setting up factories and buying machinery, deep tech requires more spending on talent and software development. But the long-term savings from reduced royalty payments and the ability to sell technology can be substantial.

Safety and Security Considerations

Deep tech in telecom also brings security benefits. By controlling the software and hardware, India can ensure that its networks are free from backdoors and vulnerabilities. This is particularly important for critical infrastructure and defense communications. The government has mandated that all telecom equipment must be tested for security compliance under the National Security Directive on Telecommunication Sector (NSDTS). This directive encourages the use of trusted sources and indigenous technology.

However, there are risks too. Developing technology in-house means you are responsible for patching vulnerabilities and maintaining security standards. Indian companies are increasingly investing in cybersecurity research to address this.

Alternatives and Global Comparisons

India is not alone in this push. China has been doing this for years with companies like Huawei and ZTE, which are now global leaders in 5G. South Korea and Japan also have strong indigenous telecom industries. India’s approach is unique because it combines a massive domestic market with a growing software ecosystem. Unlike China, India is not trying to create a closed ecosystem but is leveraging open standards and global partnerships.

One alternative to deep tech is to remain an assembler and rely on imported technology. This is the path many developing countries take, but it leaves them vulnerable to supply chain disruptions and trade sanctions. India’s move to deep tech is a strategic decision to avoid this vulnerability and become a net exporter of telecom technology.

Frequently Asked Questions

What is deep tech in telecom?

Deep tech in telecom refers to the development of core technologies like chips, software, and network algorithms, rather than just assembling finished products. It involves creating intellectual property and proprietary solutions that can be patented and sold.

Why is India focusing on deep tech now?

India wants to reduce its dependence on imported technology, create high-value jobs, and become a global hub for telecom innovation. The government is offering incentives and supporting research to make this transition.

Is India’s telecom manufacturing still mostly assembly?

Yes, a significant portion is still assembly, but the share of deep tech is growing. The government’s PLI scheme encourages companies to move up the value chain, and many are now designing their own products.

What are the main challenges for Indian telecom deep tech?

The main challenges are the high cost of R&D, the lack of a domestic semiconductor fabrication plant, and the need for skilled talent. However, these are being addressed through government initiatives and private investment.

Will India be able to compete with China in telecom?

India has a strong software base and a large market, which gives it a competitive edge. However, China has a head start in hardware manufacturing. India’s focus on software-defined networks and open standards could help it carve a niche.

How can I get involved in India’s telecom deep tech sector?

You can get involved by working with startups, joining government research projects, or investing in companies that are developing indigenous technology. There are also opportunities for engineers and researchers in areas like 5G/6G, AI, and chip design.

Related

• Avatar Legends Fighting Game: Which Edition & DLC?
• SD Card Not Reading? Fixes That Work
• GTA 6 Protagonists Explained: Lucia and Jason