New Delhi: The upcoming Union Budget 2025-26 is expected to unveil a new Production-Linked Incentive (PLI) scheme aimed at fostering a self-sustaining drone ecosystem in India. With an anticipated outlay exceeding Rs. 500 crore, this initiative seeks to strengthen domestic manufacturing, reduce reliance on imports, and position India as a global leader in drone technology.
In this context, Arpan Ghosh, Founder & Director at Gamma Rotors Pvt. Ltd, and Prem Kumar Vislawath, Chief Executive Officer (CEO) and Co-Founder at Marut Drones put forward their insights on the initiatives needed to bolster the drone ecosystem in India.
The Journey So Far
The PLI scheme for drones was first introduced in September 2021 with an initial allocation of Rs. 120 crore over three years. Its objectives included enhancing drone production, developing components, and supporting software development. The scheme aimed to promote indigenous drone manufacturing and reduce import dependency. However, the rapidly evolving drone sector has since called for a substantial increase in budget allocations to unlock its full potential.
Industry Expectations from PLI 2.0
Industry leaders have voiced their support for enhanced government intervention. Ghosh highlights the transformative potential of the new budget.
“Union Budget 2025 holds the potential to accelerate India’s drone sector toward global leadership. With the market poised to generate significant economic value and employment opportunities, strategic government support can further enhance growth. Building on the ₹57 crore allocated under the PLI scheme in 2024, increasing this to even Rs. 100-120 crore will boost indigenous production and innovation, particularly in defense, surveillance, and logistics,” Ghosh said.
In addition to increased funding, Ghosh advocates for a dedicated research and development (R&D) fund.
“To foster advanced drone technologies, a dedicated ₹300 crore R&D fund is recommended to focus on AI-enabled and dual-use drones, driving breakthroughs in autonomous navigation, GPS-denied environments, and operational efficiency. Simplifying regulations, especially for BVLOS (Beyond Visual Line of Sight) operations, will further enable widespread adoption across industries,” he added.
Expanding Scope of the New Scheme
The forthcoming PLI scheme is expected to go beyond manufacturing incentives to promote a variety of services. These include drone leasing, domestic coding, and the sale of software for operating Unmanned Aircraft Systems (UAS). By expanding its scope, the scheme aims to:
- Drive innovation across the drone value chain.
- Incentivize indigenous development.
- Attract investments in high-value manufacturing and cutting-edge technologies.
A significant thrust will be on incentivizing local manufacturers to produce drone components domestically. Presently, 50-60% of drone parts used in India are imported. The new scheme seeks to reverse this trend by offering incentives to increase localization levels to about 30% of the total value.
Strategic Focus on Defense and National Security
The drone industry anticipates a substantial allocation for defense-related procurement under the new scheme.
“For self-reliance and global competitiveness, introducing tax incentives and custom duty waivers on critical components is essential. Additionally, a proposed Rs. 2,000-3,000 crore allocation for defense procurement will facilitate large-scale drone deployment for border surveillance, logistics, and national security,” Ghosh emphasized.
Addressing Growing Demand
The demand for drones in sectors such as agriculture, infrastructure development, logistics, and surveillance continues to rise.
Logistics drones are particularly gaining prominence due to their role in ensuring rapid payload delivery and precise logistical support. “Logistics drones play a critical role in ensuring rapid payload delivery and precise logistical support in routine and hostile environments, revolutionizing supply chains across healthcare, disaster relief, and defense. Armed UAVs, or attack drones, ensure precision strikes on high-value targets, reducing collateral damage, minimizing personnel risks, and maintaining operational secrecy,” Ghosh explained.
According to Vislawath, drone technology can be used to address challenges like irrigation, mechanization, and infrastructure in agriculture. He urges the government for fiscal allocations to enhance agri-mechanization, particularly through drone applications.
“India’s Gross Value Added (GVA) from agriculture stands at Rs. 23 lakh crore with a share of 18% in the total GVA. With 46% of the population employed in agriculture, the sector can significantly benefit from drone technology. Introducing uniform subsidy schemes for drones across states would accelerate adoption, creating rural agri-entrepreneurs and generating employment opportunities in tier-2 and tier-3 cities.
A revamped and enhanced Production-Linked Incentive (PLI) scheme, with a funding allocation of over Rs. 500 crore, would play a crucial role in building a self-sustaining ecosystem. This would encourage local manufacturing, promote drone leasing, and support the domestic development of Unmanned Aircraft Systems (UAS). Additionally, with reduced interest on drone loans and by lowering GST rates, drone technology would significantly become significantly accessible for farmers, enabling wider adoption of drones in agriculture.”
Vision for 2030
The expanded PLI scheme, combined with strategic measures, is expected to transform India into a global drone hub by 2030. With nearly 300 manufacturers currently producing various kinds of UAS, the industry’s potential for economic growth and international expansion is immense.
By focusing on manufacturing, innovation, and streamlined regulations, the government aims to create a robust ecosystem for the drone industry. These efforts are expected to position India as a leader in drone technology, driving economic growth and employment opportunities in the coming years.
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