Amitabh, to your first point, why should BSNL be forced to source locally. BSNL had all the freedom all these years to run the business it wanted to run. It certainly did not do a good job of it. So now that the taxpayers' money is going to revive it, it's fair to ask it to also contribute to industry-building. Today if BSNL dies, I don't think Indian consumers will be adversely affected. The three private operators will serve the need. I agree that BSNL would want to use what its rivals are using — tested and widely used equipment. That's one argument. The other argument is by keeping 10-20% of that requirement to local manufacturers, creating a mechanism of transparent tech evaluation & procurement, it can show a higher ROI on the public money. Every big sector is built that way. Even the Oracles and Microsofts of the world were built that way, with govt acting as the anchor customer for a while. Telecom is a notch higher on the complexity level because it is a highly regulated industry. BSNL should have done it in 2G, 3G or 4G. It'll be a shame if it doesn't change its ways on the cusp of 5G.
Why Airtel gave $1B to Nokia is a telling example of how innovation of one era — managed services that Bharti innovated — doesn't remain the innovation for all times. That model let Bharti become lazy and complacent. It allowed itself to be totally locked in with big vendors. If you remember, that model also killed the telecoms industry in the US when the Lucents, Nortels, and Alcatels of the world disappeared. It becomes clunky, high-cost and low-agility in the end.
70 Cr as Earnest money is used just to make a point that small and medium telecom cos can't even afford that. If DoT or MeITY or Govt at large wanted to help SMEs overcome this, they'd have found a way.
In all this, DoT has come out as short-termist, tactical and lacking a vision.