A Strategic Bet on Domestic Drone Production
When India launched its Drone Rules 2021 and the Production-Linked Incentive (PLI) scheme in the same year, it was a calculated industrial policy move: to build a domestic drone manufacturing ecosystem from a near-zero baseline. The strategy combined regulatory enablement, financial incentives, and government procurement preference. Five years later, with over 500 drone-related companies and a target of ₹45,000 crore in production value by 2030, this multi-pronged approach is showing tangible results.
The PLI Scheme for Drones and Drone Components
The Production-Linked Incentive (PLI) Scheme for Drones and Drone Components, notified on 30 September 2021 with a total outlay of ₹120 crore, is the cornerstone of the manufacturing push. Administered by the Ministry of Civil Aviation, it provides financial incentives to manufacturers based on a percentage of their incremental domestic value addition over a base year. Eligibility is broad, covering Indian companies that manufacture drones or critical components like flight controllers, propulsion systems, sensors, cameras, and batteries. To qualify, manufacturers must meet minimum sales thresholds, maintain specified domestic value addition percentages, and ensure DGCA quality compliance. The application process is managed through the dedicated PLI portal (pli-eda.gov.in), with recipients required to file annual production reports for continued disbursement. The scheme has been crucial in attracting investment and making Indian manufacturers cost-competitive.
Drone Shakti: Fueling the Startup and Service Ecosystem
Announced in the Union Budget, the Drone Shakti initiative is designed to nurture drone startups and facilitate the Drone-as-a-Service (DaaS) model. It operates through a network of Atal Incubation Centres and government-supported accelerators, providing early-stage companies with co-working space, regulatory guidance, DGCA compliance support, and crucially, access to government procurement channels. Drone Shakti is particularly vital for software-focused startups developing drone analytics, UTM platforms, and AI-driven inspection tools. By de-risking the early stages of a startup's journey, the scheme has accelerated the growth of India's globally competitive drone software and services sector.
The Atmanirbhar Bharat Defence Procurement Push
The most significant stimulus for high-end drone manufacturing comes from the defence sector under the Atmanirbhar Bharat (self-reliant India) policy. The Ministry of Defence has placed domestic drone development at the core of its technology indigenisation agenda. Positive indigenisation lists mandate the procurement of specified drone types—from tactical reconnaissance UAVs to loitering munitions and counter-drone systems—from Indian manufacturers. Collaborative programs with DRDO and major PSUs like HAL and BEL are creating funded development opportunities, enabling companies like ideaForge, Raphe mPhibr, and a host of defence startups to build world-class, combat-proven platforms with export potential.
The Proposed Civil Drone Bill 2025: A New Legal Framework
In September 2025, the Ministry of Civil Aviation released the draft Civil Drone (Promotion and Regulation) Bill 2025, which aims to replace the Drone Rules 2021 with a comprehensive legislative framework. From a manufacturing perspective, it introduces several key provisions: mandatory domestic type certification with stricter enforcement; preferential procurement from DGCA-certified Indian manufacturers for all government agencies; the creation of a formal drone testing and certification infrastructure fund; and provisions to facilitate mutual recognition of Indian type certificates with allied countries, paving the way for India to become an export hub. The Bill is expected to be tabled in Parliament in 2026.
Stacking State-Level Incentives
Beyond central schemes, several Indian states offer additional incentives, creating a compelling case for manufacturers to 'stack' benefits. Gujarat has designated drones a priority sector, offering subsidised land, capital subsidies on plant and machinery, and DGCA liaison support. Telangana has established a dedicated drone testing corridor near Hyderabad and offers subsidised access to quality testing infrastructure. Tamil Nadu, Karnataka, and Maharashtra all have MSME-specific capital subsidy programs applicable to drone component manufacturers. Smart manufacturers are combining central PLI benefits with state-level capital subsidies and infrastructure access to significantly reduce the effective cost of setting up and expanding production capacity in India.