Drone industry: Drone industry wants PLI outlay raised to help more companies take off

The drone industry wants the production-linked incentive (PLI) scheme for drones to be expanded and its outlay increased so that more players can apply, chairperson of the Steering Committee for Advancing Local value-add and Exports (SCALE) told ET.

SCALE is an initiative under the ministry of commerce and industry, which is chaired by IN-SPACe chairman Pawan Goenka. IN-SPACe is India’s private space industry regulator.

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“(PLI scheme for) drones is a small scheme. The companies were happy with the way the scheme is being implemented. Their only ask was to expand the scheme. Industry is looking for a second opportunity for more players to apply and to increase the outlay. In this sector, almost all the beneficiaries are startups and micro, small and medium enterprises,” Goenka told ET.

He was talking about the feedback received from the drone industry at the stakeholder meeting on PLI schemes where the Department for Promotion of Industry and Internal Trade held a meeting with over 1,200 stakeholders from 14 sectors on Saturday.

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The ministry of civil aviation has disbursed Rs 30 crore to the beneficiaries during 2022-23 under the PLI scheme for drones and drone components. To promote the indigenous drone industry, the government notified the scheme in September 2021. The total incentive is Rs 120 crore spread over three financial years. It is nearly double the combined turnover of all domestic drone manufacturers in 2020-21.

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The PLI rate is kept constant at 20% for all three years, which is “an exceptional treatment for the drone industry in the country”, as per the government. The eligibility norm for MSMEs and startups in terms of annual sales turnover has been kept at a nominal level. The coverage of the scheme includes developers of drone-related software also. A provisional list of 23 PLI beneficiaries was released in July 2022. The beneficiaries include 12 drone manufacturers and 11 drone component manufacturers.Vipul Joshi, chief financial officer, ideaForge Technology Limited, one of the 23 PLI beneficiaries, told ET the PLI scheme serves as a mechanism for assessing the value addition and enhancing local development initiatives within the industry.

“The increase in the overall outlay from Rs 120 crore will be instrumental in reducing our dependence on imports, boost domestic manufacturing of drone and drone components, and create employment opportunities within the sector,” he said.

Agnishwar Jayaprakash, chief executive, Garuda Aerospace, also among the 23 PLI beneficiaries, told ET that if there are no checks and balances, one would have substandard quality products getting benefits as well, and that would be a danger.

“We also want production-linked incentives to be linked with service-linked incentives. While there are only 35 to 40 DGCA-licensed drone manufacturers in the country, there are 3.5 lakh drone users in the country,” he said.