Domestic Drone-Makers Want PLI Expansion

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Garuda Aerospace CEO, Agnishwar Jayaprakash, suggested that PLIs should be accompanied by service-linked incentives.

The drone industry asks for an expansion and increase in the budget of the production-linked incentive (PLI) scheme for drones, according to the chairperson of the Steering Committee for Advancing Local value-add and Exports (SCALE). SCALE operates under the Ministry of Commerce and Industry and is chaired by Pawan Goenka, who is also the chairman of IN-SPACe, the regulator of India’s private space industry.

The PLI scheme for drones is small but has been well-received by companies. The primary request from the industry is to broaden the scheme to allow more participants and to increase the financial outlay. This sector predominantly benefits startups and micro, small and medium enterprises (MSMEs). The idea is fuelled by the feedback from a stakeholder meeting on PLI schemes organised by the Department for Promotion of Industry and Internal Trade. The meeting involved over 1,200 stakeholders from 14 different sectors.

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During the fiscal year 2022-23, the Ministry of Civil Aviation allocated Rs 30 crore under the PLI scheme to beneficiaries for drones and drone components. Introduced in September 2021 to support indigenous drone manufacturing and services, the scheme offers a total incentive of Rs 120 crore over three financial years, nearly doubling the total revenue of all Indian drone manufacturers in 2020-21.

drone
Representational image from Drone Vidya

The scheme provides a uniform PLI rate of 20% for its duration, a move described by the government as “exceptional treatment” for the drone industry. Eligibility criteria for MSMEs and startups are set at minimal annual sales turnover, and the scheme also covers developers of drone-related software. A provisional list of 23 PLI beneficiaries, including 12 drone manufacturers and 11 drone component manufacturers, was released in July 2022.

Vipul Joshi, CFO of ideaForge Technology Limited and one of the 23 PLI beneficiaries, emphasised the scheme’s role in evaluating value addition and promoting local development within the industry. An increase in the scheme’s budget from Rs 120 crore would help reduce import dependence, enhance domestic manufacturing of drones and components, and generate job opportunities in the sector.

Agnishwar Jayaprakash, CEO of Garuda Aerospace and also a PLI beneficiary, highlighted the need for checks and balances to prevent substandard products from benefiting from the scheme. He suggested that production-linked incentives should be accompanied by service-linked incentives, noting the discrepancy between the 35 to 40 DGCA-licensed drone manufacturers and the 3.5 lakh drone users in the country.

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