The central government has planned to launch ₹2,000 crore incentive programme to boost drone manufacturing in India. The scheme will cover various aspects, including manufacturing of drones, components, software, counter drone systems, and allied services for a period of three years.
The initiative aims to reduce India’s dependence on imported drone components while countering Pakistan’s growing drone capabilities, which have received backing from China and Turkey.
India still relies heavily on imports from China for crucial industrial inputs, many of which are essential for drone manufacturing. Data from the Global Trade Research Initiative (GTRI) shows that India’s imports from China increased from $76.4 billion in 2018 to $101.8 billion in FY2024, with 98.5% of these comprising industrial products, which contribute key components to the drone supply chai
Under the proposed drone incentive scheme, the government plans to localise the manufacturing of at least 40% of critical drone parts within the country by the end of FY 2027–28.
As per Reuters report, the government is also considering extra incentives for drone makers that source components domestically.
Additionally, the Small Industries Development Bank of India (SIDBI) is also expected to provide low-interest loans to support the working capital and R&D efforts of drone technology companies.
Notably, this is not the first time the Centre is pushing to strengthen the domestic drone technology ecosystem. Even in 2021 too, the government introduced a production-linked incentive (PLI) scheme for the drone sector with a total outlay of ₹120 crore. The PLI scheme concluded in 2024.
However, in October again, then civil aviation secretary Vumlunmang Vualnam had indicated that the government may introduce a new PLI scheme to ramp up local drone production. The urgency to implement the new plan has reportedly intensified following recent India-Pakistan tensions.
Indian authorities are currently aiming to reduce reliance on foreign players, specifically China and Israel, for drones used in defence and military applications.
