Taking another step towards realising our collective vision of an Aatmanirbhar Bharat, the Central Government under the leadership of Prime Minister Mr. Narendra Modi, has approved the Production-Linked Incentive (PLI) scheme for drones and drone components on 15 Sep 2021.
Mr. Jyotiraditya M. Scindia, Union Minister of Civil Aviation, apprised the media about the important features of the PLI Scheme in a press conference on September 16, 2021. He said that under the PLI scheme, incentives of Rs. 120 crore will be given in the next 3 years. This amount is 1.5 times the combined size of the manufacturing drone sector. Over a period of three years, estimated investment worth Rs. 5,000 Crore for manufacturing sector drones will be done which in turn will bring a turnover of Rs. 900 crore, and 10,000 job opportunities will be created. He further added that our objective is to establish India as a global drone hub by 2030 and Ministry of Civil Aviation is committed to facilitate industry, service delivery and consumers in achieving the aforesaid target.
Top 15 Features of the PLI Scheme for Drones, 2021
Illustration: PLI calculation for a manufacturer (for sample year FY 2021-22) |
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Claim year |
Sales - Net of GST (RS. crore) |
Purchase - Net of GST (RS. crore) |
Value addition (RS. crore) |
PLI rate (%) |
PLI due (RS. crore) |
FY 2021-22 |
100 |
60 |
100–60 = 40 |
20% |
40 x 20% = 8 |
Estimated pay-out schedule of PLI for drones and drone components |
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Claim year |
Sales - Net of GST (RS. crore) |
Purchase - Net of GST (RS. crore) |
Eligible value addition (RS. crore) |
PLI rate for value addition (%) |
Applicable PLI (RS. crore) |
Disburse-ment year |
FY 21-22 |
200 |
120 |
80 |
20% |
16 |
FY 22-23 |
FY 22-23 |
400 |
240 |
160 |
20% |
32 |
FY 23-24 |
FY 23-24 |
900 |
540 |
360 |
20% |
72 |
FY 24-25 |
TOTAL |
1500 |
900 |
600 |
20% |
120 |
|
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, frugal engineering and its huge domestic demand, India has the potential of becoming a global drone hub by 2030.
The PLI scheme comes as a follow-through of the liberalized Drone Rules, 2021 released by the Central Government on 25 August 2021. The PLI scheme and new drone rules are intended to catalyse super-normal growth in the upcoming drone sector.
Likely Impact of recent Drone Initiatives
Thanks to the new rules and the incentive scheme, 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 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.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.