The Government has flagged off its big push for drone manufacturing in the country by inviting applications for availing of the Production Linked Incentive (PLI) scheme for the industry.

PLI scheme was notified on 30th September 2021. The total incentive is Rs 120 crore spread over three financial years, which is nearly double the combined turnover of all domestic drone manufacturers in 2020-21.

The PLI rate is 20% of the value addition, one of the highest among PLI schemes. The value addition shall be calculated as the net annual sales revenue from drones and drone components.  PLI rate has been kept constant at 20% for all three years, an exceptional treatment for drones

As per the scheme, minimum value addition norm is at 40% of net sales for drones and drone components instead of 50% in the case of other industries.

Eligibility norm for MSME and startups is at nominal levels.

Coverage of the scheme includes developers of drone-related software also. PLI for a manufacturer shall be capped at 25% of total annual outlay. This will allow widening the number of beneficiaries. In case manufacturers fail to meet the threshold for the eligible value addition for a particular financial year, they will be allowed to claim the lost incentive in the subsequent year if they make up the shortfall in the subsequent year.

The application form is of one page only, along with the certificate from the head of organisation and the statutory auditor. More than one company within a Group of Companies may file separate applications under this PLI scheme which will be evaluated independently. However, the total PLI payable to such applicants will be capped at 25% of the total financial outlay under this PLI scheme. Deadline for submission of application form is 2359 hours on 31st March 2022.

Government order for PLI application.  PLI application form

The Central Government has undertaken a series of measures to promote India’s upcoming drone industry such as:

·         Liberalised Drone Rules, 2021 has been notified.

·         Drone Airspace Map has been published opening up nearly 90% of Indian airspace as a green zone for drone flying up to 400 feet

·         UAS Traffic Management (UTM) Policy Framework has been published on 24th October 2021

·         Monetary grant program for purchase of agricultural drones was announced by the Union Agriculture Ministry. 

·         Drone import policy has been notified on 9th February 2022, banning import of foreign drones and freeing up import of drone components

·         Abolishing the requirement of a drone pilot licence.

·         15 drone schools across the country have been approved by DGCA. More are on the anvil.

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