The Ministry of Civil Aviation has notified the operational guidelines for the Production Linked Incentive (PLI) scheme for drones and drone components in India yet another step in realizing India's aim of becoming a prominent drone manufacturing hub by 2030.
The government has approved the PLI scheme with an outlay of Rs 120 crore and the scheme which will be in force till March 31 2025, ministry sources said.
The guidelines for the PLI scheme have been finalised after consultations with stakeholders, including industry representatives. The PLI will be extended only to companies engaged in the manufacturing of drones and drone components in India.
The Indian government expects the annual turnover of the drone manufacturing sector to cross Rs 900 crore and the drone services sector to exceed R 30,000 crore in the next three years. The government also believes that the drone sector can generate more than five lakh jobs.
With the recent notification of the guidelines, the government will invest Rs 120 crore in the PLI scheme for the drone manufacturing sector. With social welfare a priority, it is urging the industry to primarily focus on applications in the fields of agriculture and healthcare, besides military use. Spraying of nano urea, transportation of Covid-19 vaccines, weather forecasting, surveillance of sanctuaries and forest areas, border patrolling and rural surveying are some drone applications that the government has been focusing on.
At the Bharat Drone Mahotsav, organized in May this year, Prime Minister Narendra Modi sent out a strong message for ushering in transformational change by making India the hub of drone manufacturing by 2030. By flying a drone himself, the PM probably tried to convey the message that these systems will become essential for business and social welfare in the future and India intends to become a key player in the international market.
Under the PLI scheme, the total incentive per manufacturer is capped at Rs 30 crore which is 25 % 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.
Developers of software for drones and drone components will also be eligible for PLI. The Project Management Agency (PMA) appointed by the ministry will evaluate the applications and a committee chaired by the civil aviation secretary will consider the applications as recommended by the PMA.
Further, an Empowered Group of Secretaries, chaired by the Cabinet Secretary, will monitor the scheme and take appropriate action to ensure that the expenditure is within the prescribed outlay as approved by the Union Cabinet.
“Excess incentive paid to any applicant (due to any reason like sales return in the subsequent year or some other reason) will be adjusted in the incentives payable in the next year(s),” the guidelines states.
“If there are no incentives payable in the next year(s), the applicant has to return the incentive along with interest calculated at 3 years SBI MCLR prevailing on the date of disbursement, compounded annually, for the number of days of holding the excess incentive,” the ministry said.