Considering its traditional strengths in innovation, frugal engineering, IT, as well as its huge domestic demand, India has the potential of becoming a global drone hub by the year 2030.
To boost Modi government’s Atmanirbhar Bharat, the Centre has approved the Production-Linked Incentive (PLI) scheme for drones and drone components. According to the Ministry of Civil Aviation, drones offer multiple benefits to almost all sectors of the economy, including defence, agriculture, infrastructure, surveillance, mining, emergency response, transportation, geo-spatial mapping, law enforcement, etc. Considering its traditional strengths in innovation, frugal engineering, IT, as well as its huge domestic demand, India has the potential of becoming a global drone hub by the year 2030. The government-approved PLI scheme for drones and drone components comes as a follow-through of the liberalised Drone Rules 2021, which was released by the Centre on 25 August 2021. Following are some of the top features of the PLI scheme for drones:
- An amount of Rs 120 crore has been allocated for the PLI scheme for drones and drone components spread over three financial years. This amount is almost double of all domestic manufacturers of drones’ combined turnover in the Financial Year 2020-21.
- For a manufacturer of drones and drone components, the incentive shall be as high as 20% of the value addition made by her.
- The calculation of the value addition will be done as the annual sales revenue from drones and their components minus the drone and drone components’ purchase cost.
- In an exceptional treatment given only to the drone industry, the government has agreed to keep the PLI rate constant at 20 per cent for all three years.
- The PLI scheme’s proposed tenure is three years starting in the Financial Year 2021-22. After studying its impact in consultation with the industry, the PLI scheme will be extended or redrafted.
- In another exceptional treatment to the drone industry, the government has agreed to fix the minimum value addition norm at 40 per cent of net sales for drones and their components instead of 50 per cent.
- A wide variety of drone components are covered under the PLI scheme including Airframe, power systems, propulsion systems (engine and electric), launch and recovery systems, batteries and associated components; Inertial Navigation System, Inertial Measurement Unit, flight control module, ground control station as well as associated components; Communications systems, cameras, spraying systems, sensors and related payload, etc.; ‘Detect and Avoid’ system, trackers, emergency recovery system, etc., as well as other components critical for safety and security.
- The central govt has agreed to widen the incentive scheme’s coverage to include developers of drone-related IT products as well.