New Delhi: In a major push toward self-reliance and technological advancement, the Indian government is set to launch a ₹1,998 crore (USD 234 million) incentive scheme aimed at dramatically scaling up domestic drone production for both civilian and military use. The move comes in the wake of rising regional drone tensions and reflects India’s strategic urgency to build an independent, resilient unmanned aerial ecosystem.
The new scheme significantly expands on the earlier ₹120 crore Production-Linked Incentive (PLI) introduced in 2021, which had limited uptake due to funding and execution challenges, particularly among startups.
What the New Scheme Covers
According to government and industry sources, the programme will:
- Support manufacturing of drones, subsystems, and critical components
- Cover software, anti-drone (counter-UAV) technologies, and drone services
- Offer low-interest working capital and R&D loans through SIDBI
- Enable 40% indigenisation of critical components like motors, sensors, and imaging systems by FY2028
Strategic Context: Rising Drone Tensions
The announcement follows a brief but high-stakes drone conflict with Pakistan in May 2025, marking the first time both countries deployed UAVs at scale. With Pakistan advancing drone capabilities via partnerships with China and Turkey, India’s response underscores a shift toward domestic capacity-building for security and surveillance.
Historically, India has depended on Israeli drone imports for military use. But with over 600 homegrown drone companies now active, the government sees a clear opportunity to reduce foreign dependence and emerge as a global drone hub by 2030.
Policy Execution and Stakeholders
- Nodal Agency: Civil Aviation Ministry
- Support Partners: Defence Ministry, SIDBI
- Target Beneficiaries: Startups, MSMEs, and large tech firms in the UAV and anti-drone domains
- Ecosystem Focus: Localisation of hardware, deep tech innovation, and dual-use UAV applications (agriculture, logistics, surveillance, etc.)
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Expected Outcomes
- Increase India’s share in the global drone market
- Generate high-tech employment and support Make in India goals
- Stimulate R&D innovation in AI-powered unmanned systems
- Build a strategic drone reserve for border defence and disaster management
