New Production-Linked Incentives for Drone Manufacturing

In 2025, the Government of India is set to introduce a revamped Production-Linked Incentive (PLI) scheme aimed at encouraging a self-sustaining drone ecosystem. This new initiative is expected to allocate over ₹500 crore and will enhance the previous PLI scheme, which provided ₹120 crore over three years for domestic drone manufacturing. The new scheme focuses on increasing localisation and reducing reliance on imported drone components.

Overview of the New PLI Scheme

The updated PLI scheme will provide incentives based on a predetermined percentage of total drone sales. This approach encourages manufacturers to produce drones and their components locally. The scheme aims to reverse the current trend where 50-60 per cent of drone parts are imported. The target is to increase domestic production to about 30 per cent of the total value.

Expansion of Incentives

The new PLI 2.0 scheme will not only focus on drone manufacturing but will also extend to services such as drone leasing, coding, and the development of anti-drone systems. This broader scope is designed to spur innovation throughout the entire value chain. By including these areas, the government aims to attract investments into high-value manufacturing and advanced technologies.

Impact on the Drone Industry

India currently has around 300 drone manufacturers catering to various sectors, including defence and agriculture. The anticipated demand for drones is expected to grow in numerous industries, such as infrastructure development and surveillance. The new PLI scheme is seen as important step towards increasing the global competitiveness of India’s drone sector.

Government Support and Policy Framework

The Government of India has already implemented several initiatives to boost the drone industry. The liberalised ‘Drone Rules’ and the original PLI scheme have played roles in promoting drone usage across multiple sectors. These policies have facilitated innovation and allowed start-ups to thrive, positioning India as a burgeoning leader in drone technology.

Future Prospects

Industry experts advocate for the introduction of PLI 2.0 with a dedicated focus on the drone ecosystem. The expectation is that this scheme will not only enhance domestic manufacturing but also ensure a comprehensive approach to developing drone technology and its applications.

Questions for UPSC:

1. Discuss the significance of Production-Linked Incentive schemes in promoting domestic manufacturing in India.
2. Critically examine the role of drone technology in enhancing agricultural productivity in India.
3. Explain the concept of localisation in manufacturing. How does it impact the economy?
4. With suitable examples, discuss the potential applications of drones in disaster management and surveillance.

Answer Hints:

1. Discuss the significance of Production-Linked Incentive schemes in promoting domestic manufacturing in India.

1. PLI schemes provide financial incentives based on sales, encouraging local production.
2. They aim to reduce import dependency, encouraging self-reliance in manufacturing sectors.
3. Such schemes boost innovation and competitiveness among domestic manufacturers.
4. They attract foreign investments, enhancing technological advancements in local industries.
5. Success in sectors like electronics and pharmaceuticals can be replicated in drone manufacturing.

2. Critically examine the role of drone technology in enhancing agricultural productivity in India.

1. Drones facilitate precision farming by providing real-time data on crop health and soil conditions.
2. They enable efficient monitoring of large agricultural areas, reducing labor costs and time.
3. Drones assist in targeted pesticide and fertilizer application, minimizing waste and environmental impact.
4. They enhance irrigation management through aerial imagery, optimizing water usage.
5. Incorporating drones can lead to higher yields and better resource management in agriculture.

3. Explain the concept of localisation in manufacturing. How does it impact the economy?

1. Localisation refers to producing components domestically rather than relying on imports.
2. It reduces supply chain vulnerabilities and enhances national security in critical sectors.
3. Boosts local job creation and supports small and medium enterprises in the region.
4. Encourages innovation and skill development among the workforce, enhancing productivity.
5. Increased localisation can lead to a favorable balance of trade and economic growth.

4. With suitable examples, discuss the potential applications of drones in disaster management and surveillance.

1. Drones can assess damage after natural disasters, providing real-time data for rescue operations.
2. They facilitate search and rescue missions by covering large areas quickly and efficiently.
3. Drones can deliver medical supplies to remote or inaccessible areas during emergencies.
4. In surveillance, drones monitor borders, infrastructure, and large public events for security purposes.
5. Examples include using drones for flood assessment and monitoring wildfires to inform response strategies.