Government approves PLI scheme for drones and its components; industry may see investment over Rs 5,000 Cr

The Central Government has approved Production-Linked Incentive (PLI) scheme for drones and drone components. The PLI scheme comes as a follow-through of the liberalised Drone Rules, 2021 released by the Central Government in August.  

The PLI scheme and new drone rules are intended to catalyse super-normal growth in the upcoming drone sector, where the total amount allocated is Rs 120 crore spread over three financial years. This amount is nearly double the combined turnover of all domestic drone manufacturers in FY 2020-21. 

Drones offer tremendous benefits to almost all sectors of the economy, the statement mentioned. These include– agriculture, mining, infrastructure, surveillance, emergency response, transportation, geo-spatial mapping, defence, and law enforcement to name a few.  

“Drones can be significant creators of employment and economic growth due to their reach, versatility, and ease of use, especially in India’s remote and inaccessible areas.”    

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According to a press statement, India has the potential of becoming a global drone hub by 2030 given its traditional strengths in innovation, information technology, frugal engineering and its huge domestic demand.

With the new rules and incentive schemes, the drones and drone components manufacturing industry may see an investment of over Rs 5,000 crore over the next three years. 

The annual sales turnover of the drone manufacturing industry may grow from Rs 60 crore in 2020-21 fold to over Rs 900 crore in FY 2023-24. The incentive for the manufacturers shall be as high as 20 percent of the value addition made.

The drone manufacturing industry is expected to generate over 10,000 direct jobs over the next three years, and its services industry (operations, logistics, data processing, traffic management etc.) is far bigger in scale. It is expected to grow to over Rs 30,000 crore in the next three years. The drone services industry is expected to generate over five lakh jobs in three years.

In April this year, the government had also approved a production linked incentive PLI scheme for white goods - Air Conditioners (ACs) and LED Lights - with a budgetary outlay of Rs 6,238 crore to give a boost to domestic manufacturing. It also approved incentives worth Rs 10,683 crore under the PLI scheme for MMF Apparel, MMF Fabrics and 10 segments/products of technical textiles.

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