Government Announces New Production-Linked Incentive Scheme for Drone Manufacturing
New Delhi – In a move aimed at boosting the domestic drone manufacturing industry, the Indian government today announced a new Production-Linked Incentive (PLI) scheme with a total outlay of ₹120 crore over the next three years. The scheme, unveiled by the Ministry of Civil Aviation, seeks to incentivize manufacturers to enhance their production capabilities and contribute to the growth of the drone ecosystem in India.
Background
The drone industry in India has been witnessing rapid growth, driven by increasing applications in various sectors such as agriculture, infrastructure, surveillance, and logistics. Recognizing the potential of this sector, the government has been actively promoting the use of drones through various policy initiatives, including the liberalization of drone rules and the introduction of drone certification schemes. The PLI scheme is the latest in a series of measures designed to make India a global drone hub by 2030.
Key Details
- Incentive Structure: The PLI scheme will provide financial incentives to eligible drone manufacturers based on their incremental sales over the base year of 2024-25. The incentive rate will be up to 20% of the value addition made by the manufacturers.
- Eligibility Criteria: The scheme is open to both domestic and foreign drone manufacturers who meet certain eligibility criteria, including a minimum investment threshold and a commitment to local value addition.
- Scheme Duration: The scheme will be in effect for three years, from FY2025-26 to FY2027-28.
- Budget Outlay: The total financial outlay for the scheme is ₹120 crore.
- Nodal Agency: The Ministry of Civil Aviation will be the nodal agency responsible for implementing and monitoring the scheme.
Impact Analysis
The PLI scheme is expected to have a significant positive impact on the Indian drone industry. By providing financial incentives, the scheme will encourage manufacturers to increase their production, invest in research and development, and enhance their competitiveness. This, in turn, will lead to the creation of new jobs, the development of new technologies, and the growth of the overall drone ecosystem.
Businesses: The scheme will benefit drone manufacturers by reducing their production costs and increasing their profitability. It will also encourage them to expand their operations and invest in new technologies.
Economy: The growth of the drone industry will contribute to the overall economic growth of the country by creating new jobs, generating revenue, and attracting investment.
Consumers: The increased availability of drones will benefit consumers by providing them with access to a wider range of products and services, such as drone-based delivery, surveillance, and agricultural services.
Expert Commentary
“The PLI scheme is a welcome step that will provide a significant boost to the domestic drone manufacturing industry,” said Amber Dubey, Partner at AZB & Partners and an expert on the drone sector. “It will encourage manufacturers to invest in local value addition and help make India a global drone hub.”
According to a senior official at the Ministry of Civil Aviation, “The government is committed to promoting the growth of the drone industry in India. The PLI scheme is one of several initiatives that we are taking to achieve this goal. We are confident that these measures will help make India a global leader in the drone sector.”
Market Implications
The announcement of the PLI scheme is expected to have a positive impact on the stock prices of drone manufacturers and related companies. The scheme will also encourage new players to enter the market, leading to increased competition and innovation. The drone market in India is projected to grow at a rapid pace in the coming years, driven by increasing demand from various sectors such as agriculture, infrastructure, and logistics.
Future Outlook
The government is expected to announce further policy initiatives to promote the growth of the drone industry in India. These initiatives may include the development of drone corridors, the establishment of drone training centers, and the promotion of drone research and development. The government is also working on developing a comprehensive regulatory framework for the drone industry that will ensure safety and security while promoting innovation and growth.
Conclusion
The Production-Linked Incentive (PLI) scheme for drone manufacturing is a significant step towards making India a global drone hub. By providing financial incentives to manufacturers, the scheme will encourage them to increase their production, invest in research and development, and enhance their competitiveness. This will lead to the creation of new jobs, the development of new technologies, and the growth of the overall drone ecosystem, contributing to India’s economic development and technological advancement.