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PLI scheme worth Rs 120 cr provided for Indian drone, component manufacturers

PLI scheme worth Rs 120 cr provided for Indian drone, component manufacturers

Production-Linked Incentive (PLI) scheme for drones and drone components worth Rs 120 crore has been notified to push the production of drones.

The PLI provided to manufacturers will be 20 per cent of the value addition in India. The PLI provided to manufacturers will be 20 per cent of the value addition in India.

Production-Linked Incentive (PLI) scheme for drones and drone components worth Rs 120 crore has been notified to push the production of drones. PLI for a beneficiary is capped at 25 per cent of the total annual outlay to ensure more beneficiaries. The PLI provided to manufacturers will be 20 per cent of the value addition in India.

Not only will manufacturers get incentives, the procedures to get drone approvals have also been made much easier through a digital sky platform which will act as a single window system for all drone-related approvals and authorisations, Minister of State for Civil Aviation General (Retd.) Dr VK Singh said in a written reply to the Upper House of the Parliament.

How much Production Linked Incentive can drone manufacturers claim?

Under this scheme, the manufacturers can claim 20 per cent of the value addition in India as PLI. The PLI shall be provided over three financial years beginning from 2021-22 and will remain constant for all three years.  Minimum value addition is specified as 40 per cent of net sales.

How will value addition by Indian manufacturers of drones be calculated?

The value addition by a manufacturer will be calculated as annual sales revenue from drones and drone components (net of GST) minus the purchase cost (net of GST) of drone and drone components.

Can MSMEs and startups claim Production Linked Incentive?

Yes. If MSMEs and startups focusing on drone manufacturing have an annual sales revenue of Rs 2 crore and Rs 50 lakh of annual sales revenue in case they are focused on drone component manufacturing.

What happens if a manufacturer fails to meet the requirements for claiming PLI?

“In case a manufacturer fails to meet the threshold for the eligible value addition for a particular financial year, the manufacturer will be allowed to claim the lost incentive in the subsequent year if the manufacturer makes up the shortfall in the subsequent year. The liberalized Drone Rules, 2021 notified on 25 August, 2021 provide the regulatory framework for owning and operation of drones,” General (Retd.) Dr VK Singh said in a written reply to the Rajya Sabha.

All about Drone Rules, 2021

“These rules cover various aspects like type certification, registration and operation of drones, airspace restrictions, research, development and testing of drones, training and licensing, offences and penalties, etc.,” General (Retd.) Dr VK Singh noted.

Drones produced are required to take necessary certification and remote pilot license issued by the Directorate General of Civil Aviation (DGCA), as per the Drone Rules, 2021. It further states that an airspace map segregating the entire Indian airspace into green, yellow and red zones should be displayed on a digital sky platform. The digital sky platform will be developed as “user-friendly online single window system for all drone related approvals and authorizations. The liberalized provisions of the Drone Rules, 2021 as well as the incentives provided under the PLI scheme for drones and drone components will promote the manufacturing of drones in this country.”

No approval will be required to operate drones in green zones (airspace upto a vertical distance of 400 feet) while operations of drones yellow and red zones is subject to approval from the Airports Authority of India (AAI) and Centre respectively.  Number of forms has been reduced to five from 25 and types of fees from 72 to four. All-up weight of drones covered under these rules has been increased from 300 kg to 500 kg.

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