TRAI Proposes Separate Regulation For Foreign SIMs And eSIMs

The Telecom Regulatory Authority of India (TRAI) has proposed a new regulatory framework that would allow Indian manufacturers to embed foreign SIM and eSIM cards in machine-to-machine (M2M) and Internet of Things (IoT) devices meant exclusively for export.

To explain, TRAI has recommended a separate authorisation – called International M2M SIM Service Authorisation – for M2M and IoT devices meant for export.

Explaining its position, TRAI said that: “The sale of foreign telecom service providers’ SIM/ eSIM cards for the use in M2M/ IoT devices meant for export purposes should be regulated through a separate service authorisation under Section 3(1)(a) of the Telecommunications Act, 2023.”

Notably, the regulator has argued that export-oriented connected devices cannot be regulated under existing consumer mobile or international roaming SIM rules, which are designed around individual users and domestic telecom usage.

For context, M2M refers to machines or devices such as sensors, meters, or industrial equipment that communicate directly with other machines over a network without human involvement.

Whereas IoT is a broader category that includes connected products such as vehicles, drones, and smart devices that collect and transmit data to applications or platforms for monitoring, control, or analysis.

Why TRAI says the current framework does not work

TRAI said India’s telecom regulations assume that SIM cards serve human users, require individual know-your-customer (KYC) verification, and operate within the country. However, export-only IoT and M2M devices do not fit these assumptions.

Manufacturers typically assemble and test these devices in India before shipping them abroad. Once deployed overseas, the devices must connect immediately to local telecom networks.

For context, India does not currently have a dedicated regulatory framework governing the export and sale of foreign SIMs or eSIMs for export-only connected devices. As a result, manufacturers have had to rely on consumer-facing SIM rules that were never designed for such use cases.

TRAI said this gap creates legal uncertainty and operational hurdles for exporters, particularly as connected hardware becomes a larger part of India’s manufacturing and export ecosystem.

Whom does this proposal impact the most?

TRAI’s proposal specifically targets Indian companies exporting connected hardware, not consumer electronics. These include manufacturers of electric vehicles (EVs), drones, industrial sensors, smart meters, and asset-tracking devices.

Importantly, these products rely on embedded cellular connectivity to transmit data, receive software updates, and enable remote monitoring. Moreover, export markets often require manufacturers to embed foreign network profiles at the manufacturing stage, rather than configuring connectivity after shipment.

Electric vehicle and mobility manufacturers

EV manufacturers offer one of the clearest examples of why export-oriented connected devices need foreign connectivity profiles. Modern EVs rely on embedded cellular connectivity for vehicle tracking, battery diagnostics, performance monitoring, fleet management, and over-the-air software updates.

When Indian manufacturers export connected scooters, cars, or buses, they cannot depend on Indian telecom networks. These vehicles must connect to local networks in the destination country from the moment users switch them on.

Companies such as Ather Energy, which has outlined international expansion plans, integrate telematics systems as part of their vehicle design. Additionally, established two-wheeler exporters such as TVS Motor Company and Bajaj Auto, both of which export vehicles at scale and have electric models, increasingly ship products that rely on embedded connectivity for diagnostics and monitoring.

Moreover, larger manufacturers such as Tata Motors and Mahindra & Mahindra, which export passenger and commercial vehicles across multiple markets and have electric offerings, integrate connected-vehicle platforms and telematics systems into their products.

For these companies, embedding foreign SIM or eSIM profiles during manufacturing allows vehicles to function immediately in overseas markets without post-export reconfiguration or reliance on roaming-based workarounds.

Drone manufacturers exporting ready-to-deploy systems

Indian drone manufacturers increasingly export fully assembled, ready-to-deploy systems rather than bare airframes. These drones serve agriculture, surveying, infrastructure inspection, and surveillance use cases.

Notably, many export-grade drones rely on cellular connectivity for telemetry, tracking, geofencing, and data transmission, particularly in enterprise and government deployments abroad.

Companies such as DroneAcharya, Garuda Aerospace, and ideaForge operate in this space. For instance, DroneAcharya has previously disclosed export orders for drones, meanwhile Garuda Aerospace targets markets including the US, Australia, and the Middle East. Further, ideaForge, has said that it is intensifying efforts to enable exports to North America and other key regions and has fulfilled export orders to multiple countries.

Consequently, embedding and testing foreign connectivity profiles in India reduces deployment delays and avoids reliance on roaming-based testing once the drones reach overseas markets.

Industrial IoT and smart infrastructure exporters

TRAI’s recommendations also cover exporters of industrial IoT equipment such as smart meters, industrial sensors, asset-tracking devices, and factory automation systems.

For context, India already exports smart infrastructure hardware at scale. Genus Power Infrastructures and Secure Meters manufacture smart meters in India and supply them to overseas markets, including parts of Asia, Africa, and the Middle East. 

Indian engineering and industrial automation firms also participate in export-oriented infrastructure projects. Companies such as Larsen & Toubro and Schneider Electric India supply electrical, automation, and control systems for infrastructure and industrial deployments outside India, where connected equipment is a core requirement.

Once installed, such devices must function reliably on local networks for years. Replacing SIM cards after export often proves impractical, particularly for equipment embedded in grids, factories, or large industrial sites. TRAI has therefore treated these M2M and IoT use cases as distinct from consumer telecom services.

What does TRAI propose exactly?

TRAI has recommended creating a separate, light-touch service authorisation under the Telecommunications Act, 2023, for embedding foreign SIM and eSIM cards in export-focused M2M and IoT devices manufactured in India.

Importantly, TRAI said it designed the framework to keep regulatory burden low. The Indian telecom regulator proposed a light-touch authorisation model with an online application process and digitally issued approvals, rather than a licence regime involving extensive financial or operational requirements.

Under the proposed International M2M SIM Service Authorisation, companies incorporated under the Indian Companies Act would be permitted to sell foreign telecom service providers’ SIMs and eSIMs to Indian enterprise entities intending to export M2M and IoT devices fitted with such SIMs or eSIMs. The authorisation would be valid for 10 years and would require a Rs. 5,000 application processing fee. Importantly, there would be no entry fee, minimum equity/net worth requirement, or bank guarantee.

Additionally, TRAI has allowed authorised entities, including manufacturers, to activate foreign SIMs and eSIMs in India for up to six months strictly for testing and integration. After testing, companies must suspend the SIM or eSIM and export the device. Pertinently, the framework does not permit commercial use of these SIMs within India.

The broader regulatory context on foreign SIM cards

This consultation comes against the backdrop of strict government oversight of foreign SIM and eSIM services.

To explain, foreign SIMs can only be activated outside India and require extensive customer verification, including passport and visa details, along with monthly reporting to security agencies under the DoT’s policy effective from January 2022. This framework treats foreign SIMs as consumer services built around individual identity verification and travel use cases.

In January 2024, the DoT directed Google Play to remove foreign eSIM providers Airalo and Holafly for operating without required permissions, signalling that app-based or digital SIM cards meant for use in foreign countries fall squarely within telecom regulatory oversight in India.

As of December 2024, 29 entities hold a no-objection certificate (NOC) from the DoT to sell international roaming SIMs and global calling cards to Indians travelling abroad.

Why do telecom operators back a separate framework?

Telecom operators have told TRAI that existing SIM and roaming rules fail to address the needs of devices manufactured in India but meant to operate overseas.

In its submission to TRAI, Vodafone Idea (Vi) said manufacturers cannot adequately test export-bound IoT devices using Indian SIM cards or standard international roaming arrangements. The operator argued that roaming-based testing raises costs while still failing to replicate the real network conditions that devices encounter once deployed in another country.

Vi also pointed out that several core functions depend on access to local carrier profiles. These include over-the-air software updates, narrowband IoT (NB-IoT) connectivity, and other network-specific capabilities. According to the operator, manufacturers cannot reliably test these functions using roaming SIMs.

Vi’s submission reinforces TRAI’s view that export-only M2M connectivity needs a separate regulatory framework, rather than being governed by rules designed for individual mobile subscribers.

Why this matters:

As the government pushes the Make in India initiative beyond assembly and into higher-value manufacturing, exporters are no longer shipping standalone hardware. They are shipping vehicles, machines, and infrastructure that depend on embedded connectivity to function from the moment they are deployed overseas.

The lack of a clear regulatory pathway for foreign SIMs in export-only devices creates friction at the manufacturing stage. Companies redesign products for different markets, delay exports while reconfiguring connectivity, or rely on roaming-based workarounds that raise costs and limit functionality. And pertinently, for products such as EVs, drones, and smart meters, connectivity is not an add-on but a core operational requirement.

TRAI’s proposal addresses this bottleneck by separating export-only M2M and IoT connectivity from consumer telecom regulation. If implemented, it could make it easier for Indian manufacturers to ship globally deployable connected hardware at scale, aligning telecom regulation with the government’s broader push to position India as a manufacturing base for advanced, export-ready products.

Without this legal and regulatory clarity, exporters risk losing out as global buyers increasingly expect connected devices to arrive fully provisioned and ready for use.

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