Civil aviation ministry disbursed ₹30 cr in FY23 under PLI schemes for drones, drone components

The Ministry of Civil Aviation on Tuesday said it has disbursed an amount of ₹30 crore to the beneficiaries in FY23 under the PLI (production-linked incentive) scheme for drones and drone components. The government notified the PLI scheme for drone and drone components on September 30, 2021. A provisional list of 23 beneficiaries was released on July 6, 2022, which included 12 drone manufacturers and 11 drone component manufacturers.

According to the ministry, the total incentive is ₹120 crore spread over three financial years. It is nearly double the combined turnover of all domestic drone manufacturers in FY2020-21. For this scheme, the PLI rate is 20% of the value addition which is one of the highest among PLI schemes. The coverage of the scheme includes developers of drone-related software, MSMEs and startups.

"Under this scheme, the value addition is calculated as the annual sales revenue from drones and drone components (net of GST) minus the purchase cost (net of GST) of drone and drone components. The PLI rate is kept constant at 20% for all three years, which is an exceptional treatment for the drone industry in the country," the ministry said in a statement.

"The Minimum value addition norm has been at 40% of net sales for drones and drone components instead of 50% which is another exceptional treatment for the industry," the ministry added.

PLI for a manufacturer is capped at 25% of the total annual outlay. This allows for the widening of the number of beneficiaries. In case a manufacturer fails to meet the threshold for the eligible value addition for a particular financial year, she will be allowed to claim the lost incentive in the subsequent year if she makes up the shortfall in the subsequent year, according to the ministry.

The PLI scheme was launched by the government in 2021, as part of the flagship ‘Aatmanirbhar Bharat’ push to make domestic manufacturing globally competitive and to create global champions in manufacturing. As part of the PLI scheme, the government offers incentives to companies on incremental sales from products manufactured in the country. The PLI scheme aims to boost domestic manufacturing, curb cheaper imports, reduce import bills, improve the cost competitiveness of domestically manufactured goods and enhance domestic capacity and exports.

In the Union Budget 2023-24, Finance Minister Nirmala Sitharaman said that startups will be promoted to facilitate ‘Drone Shakti’ through varied applications and for Drone-As-A-Service (DrAAS).  In select ITIs, in all states, the required courses for skilling will be started. In vocational courses, to promote crucial critical thinking skills, to give space for creativity, 750 virtual labs in science and mathematics, and 75 skilling e-labs for the simulated learning environments, will be set up in 2022-23.