In its attempt to hit the major milestone of making India a Drone hub by 2030, the Union Cabinet cleared the production-linked incentive (PLI) scheme on September 15, 2021. Under the Scheme, drones and drone components manufacturers will receive a 20 percent incentive.
The PLI scheme follows on the heels of the recently announced liberalized drone policy that has made owning and operating drones easier will provide positive impetus to the sector.
“Currently, 90 percent of drones in use in India are imported. There is no component ecosystem in the country and most of the major components are imported, especially from China,” said Ameet Nichani, owner of Ascom Systems, which designs and develops drones
“The government is giving the deserved recognition to the drone industry. It will now be upon local manufacturers to produce world-class products and scale up their research and development,” added Ameet.
Salient features of the Scheme
Under the scheme government has allocated INR 120 crore for the drone industry spread over three financial years. The amount is nearly double the combined turnover of all domestic drone manufacturers in fiscal 2020-21, the government said in a press release.
Manufacturers will receive incentives of up to 20 percent on the value addition made by them, which will be calculated by subtracting the purchase cost of drone and drone components from annual sales revenue.
Unlike other sectors where the PLI rate reduces every year, the government will retain the PLI rate for drone manufacturing at 20 percent in all three years.
“This Scheme is a welcome step to incentivize drone manufacturing and allied industries. It will provide the much-needed impetus to the sector and boost research and innovation, especially in drone components. It is good to see that the Union government is adopting and adapting to global technological advancements, especially in the UAV sector,” said Wing Commander S Vijay (Veteran), Chief Operating Officer, Skye Air Mobility.
Today some of the most exciting potential applications come from the use of drones in healthcare and medical deliveries. Drones are effectively changing the game in almost all industry and a look at the data will show how this sector will be dominant by 2025.
MSMEs and startups with an annual sales turnover of Rs 2 crore (for drones) and Rs 50 lakh (for drone components) are eligible for the PLI scheme. Non-MSME firms with an annual sales turnover of Rs 4 crore (for drones) and Rs 1 crore (for drone components) are eligible to get incentives under the Scheme.
The Scheme will also cover developers of drone-related IT products. The Scheme covers many drone components such as airframe, propulsion systems (engine and electric), power systems, batteries and associated components, launch and recovery systems.
It will also include inertial measurement units and navigation systems, ground control stations, flight control modules, and associated components. Drone components used in communications systems such as radiofrequency and transponders are also covered under the Scheme.