The civil aviation ministry has notified the operational guidelines for the Production Linked Incentive (PLI) scheme for drones and drone components.

The government has approved the PLI scheme with an outlay of Rs 120 crore and the scheme is to be implemented during the 2022-23 to 2024-25 period.

Scope of the PLI scheme for drones and drone components

• Drones offer tremendous benefits to almost all sectors of the economy. 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.

• Given its traditional strengths in innovation, information technology and its huge domestic demand, India has the potential of becoming a global drone hub by 2030.

• 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 to over Rs 900 crore in FY 2023-24.  The drone manufacturing industry is expected to generate over 10,000 direct jobs over the next three years. 

• The drone 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 next three years. 

• The drone services industry is expected to generate over five lakh jobs in three years.

Key points of the guidelines:

• The PLI will be extended only to companies engaged in the manufacturing of drones and drone components in India.

• The total PLI per manufacturer is capped at Rs 30 crore which is 25 per cent of the total financial outlay of Rs 120 crore.

• Indian MSMEs and startups manufacturing drones and having annual sales turnover of Rs 2 crore will be eligible for the scheme. In the case of drone component makers, the eligibility threshold will be Rs 0.5 crore.

• For Indian non-MSMEs that are into making drones, the annual sales turnover requirement will be Rs 4 crore for claiming the PLIs. The minimum level will be Rs 1 crore in the case of non-MSME drone component makers, as per the ministry.

• Subject to the norms, developers of software for drones and drone components will also be eligible for PLI.

PLI schemes

An outlay of Rs 1.97 lakh crore has been announced in Union Budget 2021-22 for Production Linked Incentive (PLI) schemes for 13 key sectors for a period of five years starting from FY 2021-22.

These sectors are:

1) Mobile manufacturing and specified electronic components (Large scale electronics manufacturing)

2) Critical key starting materials/drug intermediaries & active pharmaceutical ingredients

3) Manufacturing of medical devices 

4) Automobiles and auto components

5) Pharmaceuticals

6) Specialty steel

7) Telecom and networking products

8) Electronic/technology products

9) White goods (ACs and LEDs)

10) Food products

11) Textile products: man-made fibre (MMF) segment and technical textiles

12) High efficiency solar PV modules

13) Advanced Chemistry Cell (ACC) battery.

• In September 2021, the Union government approved a PLI scheme for drones and drone components with an allocation of Rs 120 crore spread over three financial years.

• The objectives of PLI schemes are to make manufacturing in India globally competitive by removing sectoral disabilities, creating economies of scale and ensuring efficiencies.

• It is designed to create a complete component ecosystem in India and make India an integral part of the global supply chains. 

• The schemes are expected to attract global investments, generate large scale employment opportunities and enhance exports substantially.

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