India’s drone sector is set for explosive growth with the announcement of a new INR 2,000 crore incentive scheme aimed at boosting domestic manufacturing. The new program, which has a three-year outlay, will cover the production of drones, key components, software, and anti-drone systems. The scheme is a significant upgrade from the previous Production Linked Incentive (PLI) scheme and is designed to reduce the country’s reliance on imported drone parts, especially from China and Israel.
Under the new scheme, the government will provide financial incentives to companies that localize at least 40% of their key component manufacturing in India by 2028. Additionally, the Small Industries Development Bank of India (SIDBI) will offer "cheap loans" to help drone tech firms with their R&D and working capital needs.
This policy is a strategic response to both commercial and security needs. On the one hand, it supports startups and firms developing advanced drones for sectors like healthcare, logistics, and traffic control. On the other, it strengthens national security by ensuring the armed forces have access to indigenously built, high-quality, and reliable defense drones.