According to a government official, approximately ₹30 crore has been disbursed during FY 2022-23 under the Production Linked Incentive (PLI) Scheme to 12 drone manufacturers and 11 drone component manufacturers. The list of 23 PLI beneficiaries was released on July 6 last year. The PLI scheme is designed to financially support start-ups and small-scale entrepreneurs by providing incentives such as the 20% value addition rate, which is one of the highest among PLI schemes.
Unlike other sectors where the rate reduces every year, in drones it remains the same throughout the three years. The coverage of the scheme also includes developers of drone-related software, with eligibility norms for Ministry of Micro, Small and Medium Enterprises (MSME) and startups at nominal levels. The PLI for a manufacturer is capped at 25% of the total annual outlay, thereby allowing a wider range of beneficiaries.
The Drone Federation of India (DFI)’s president, Smit Shah, expressed happiness at the progress of the scheme, stating that the government’s decision to disburse incentives higher than the indicative limit is heartening and fulfilling the claims of all eligible manufacturers. Shah also requested the government to consider increasing the budget of the scheme to accommodate more manufacturers and incentivize the rapid growth of the Indian drone ecosystem.
The PLI scheme, notified on September 30, 2021, is expected to decrease India’s dependency on imports and increase exports while boosting the government’s Atmanirbhar Bharat initiative. Additionally, the government aims to make India a drone hub by 2030. The total financial outlay for three years (starting FY 2021-22) under the PLI scheme is approximately ₹120 crore, which is nearly double the combined turnover of all domestic drone manufacturers in FY 2020-21.
A Production Linked Incentive (PLI) scheme is a government initiative to provide financial incentives to manufacturers in specific sectors, encouraging them to increase their production and competitiveness, and reducing the country’s dependency on imports. The scheme rewards manufacturers based on their incremental production targets, and the rewards are typically a percentage of the value addition they make to their products.
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