How India's drone industry is benefiting from the PLI scheme

Abhrasnata Das

Drones are becoming increasingly popular in many developed nations, and they are being employed in a variety of sectors to supplement human labor. In India, on the other hand, drone use is still in its infancy. Nonetheless, owing to the latest government initiatives, India's drone industry is gaining traction.

In order to promote drone manufacturing possibilities in India, the Indian government launched the production-linked incentive (PLI) scheme to boost the domestic production of drones and drone components. Under the proposal, the government has set aside Rs. 120 crores to provide incentives to drone and drone component manufacturers. The PLI plan, according to the government, will help to attract around Rs. 5,000 crores in financing over the next three years and create more than 10,000 employments in the drone sector across the value chain.

The PLI scheme covers a wide variety of drone components, including airframe, propulsion systems, power systems, batteries, inertial measurement unit, flight control module, ground control station, communication systems, cameras, sensors, spraying systems, emergency recovery system, and trackers. Having said that, let’s dig deep into the possibilities that the PLI scheme can cater to the Drone industry of India.

Boost to domestic drone manufacturing

To portray the present value chain of the drone sector, it can be noted that the majority of the components are being imported from the US, China, and Europe while only the assembly is done ingeniously. However, thought the latest initiative of incentivizing as high as 20 percent of the value addition made, will boost the indigenous manufacturing of the drone and drone component and help to master the entire value chain in the near future.

“Currently, 90 per cent of drones in use in India are imported. There is no component ecosystem in the country and most of the major components are imported, especially from China. The government is giving the deserved recognition to the drone industry. It will now be upon local manufacturers to produce world-class products and scale up their research and development,” Ameet Nichani, owner of Ascom Systems.

According to Mr. Pradip Singh Kharola, Secretary Ministry of Civil Aviation, the PLI scheme for drones would encourage local manufacturing of drones and drone components, as well as increase exports in the field.

Opportunities for MSME

Under the drone manufacturing program, MSMEs with an annual turnover of Rs. 2 crores and drone component manufacturing MSMEs with an annual turnover of Rs. 50 lakhs would be eligible for incentives. Small and medium-sized businesses play a crucial part in manufacturing and delivering components to OEMs and top-tier manufacturers; hence they are vital to the supply chain's continuity. The recently announced PLI plan would bring in a lot of investment and give MSMEs in the nation a lot of opportunities.

According to Nagendran Kandasamy, CEO of Throttle Aerospace Systems, “The drones’ space in India is in a very nascent stage and so the government has kept the eligibility norm for MSME and startups in terms of annual sales turnover at INR 2 crores for drone manufacturers and INR 50 lakh for drone component manufacturers. This will definitely attract a lot of local drone and component manufacturers, which will help increase the bottom line of the company.”

Attract the private investors

Owing to Government’s initiative to explore the possibility of transforming India’s drone market into a “global drone hub by 2030”. The PLI scheme can be the right step forward towards attaining the same. Moreover, the recent PLI scheme combined with the new drone laws is increasingly making investors conscious of India’s drone industry.

The drone segment is actively witnessing a few major collaborations of drone companies and big firms. These partnerships are driving enterprises to achieve technical superiority as well as strengthen the drone industry's economic backbone. For example - Swiggy and ANRA Technologies Private Limited, an integrated airspace management firm, recently received a green signal from the Ministry of Defence, the Directorate General of Civil Aviation, and the Ministry of Civil Aviation to begin trials for beyond visual line of sight (BVLOS) drone food deliveries in India. Following the event, Swiggy then teamed up with Skylark to put their drone delivery service to the test.

Generate employment

All the aforementioned points are unitedly uplifting the drone industry of India. Drone manufacturers and service providers are expanding their product lines and recruiting to meet rising demand, which is likely to increase as the government's production-linked incentive (PLI) plans to boost the domestic manufacturing of drones. By generating more employment in this segment, it is also attracting new and creative minds to the drone industry; therefore, turning India into a global hub for drones.

To sum up, the PLI scheme will be a major factor influencing the growth of this sunrise industry by actively influencing the domestic players to meet the international benchmark for now and surpass it in the future to be a global hub for the drone by 2030; hence pushing India one step closer towards its goal of being “Atmanirbhar Bharat”.