Under the production-linked incentive (PLI) scheme, incentives of Rs 120 crore will be given in the next three years to the drone manufacturing sector, Civil Aviation Minister Jyotiraditya M. Scindia said on Thursday, while briefing the media about the important features of the PLI scheme.
“This amount is 1.5 times the combined size of the drone manufacturing sector. Over a period of three years, an estimated investment worth Rs 5,000 crore for manufacturing drones will be done, and this, in turn, will bring a turnover of Rs 900 crore, and 10,000 job opportunities will be created,” Scindia said, adding that the objective is to establish India as a global drone hub by 2030.
Drones offer tremendous benefits to almost all sectors of the economy. These include: agriculture, mining, infrastructure, surveillance, emergency response, transportation, geo-spatial mapping, defence, and law enforcement, to name a few. Drones can be significant creators of employment and economic growth due to their reach, versatility, and ease of use, especially in India’s remote and inaccessible areas.
Focusing on this being a revolutionary step for the industry, Scindia detailed the features of scheme and said, “It’s the first step towards realising our collective vision of an Aatmanirbhar Bharat; the Central Government under the leadership of Prime Minister Shri Narendra Modi, has approved the Production-Linked Incentive (PLI) scheme for drones and drone components.” After the liberalised drone rule enacted last month, the government on Wednesday approved the PLI scheme for drones and drone components.
FEATURES OF THE PLI SCHEME FOR DRONES, 2021:
• The total amount allocated for the PLI scheme for drones and drone components is INR 120 crore, spread over three financial years.
• The incentive for a manufacturer of drones and drone components shall be as high as 20% of the value addition made by the manufacturer.
• The value addition shall be 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 Government has agreed to keep the PLI rate constant at 20% for all three years, an exceptional treatment given only to the drone industry. In PLI schemes for other sectors, the PLI rate reduces every year.
• The proposed tenure of the PLI scheme is three years, starting in FY 2021-22. The PLI scheme will be extended or redrafted after studying its impact in consultation with the industry.
• The Government has agreed to fix the minimum value addition norm at 40% of net salesfor drones and drone components, instead of 50%, another exceptional treatment given to the drone industry. This will allow widening the number of beneficiaries.
• The PLI scheme covers a wide variety of drone components:
• Airframe, propulsion systems (engine and electric), power systems, batteries and associated components, launch and recovery systems;
• Inertial Measurement Unit, Inertial Navigation System, flight control module, ground control station and associated components;
• Communications systems (radio frequency, transponders, satellite-based etc.)
• Cameras, sensors, spraying systems and related payload etc.;
• ‘Detect and Avoid’ system, emergency recovery system, trackers etc. and other components critical for safety and security.
• The list of eligible components may be expanded by the Government from time to time, as drone technology evolves.
• The Government has agreed to widen the coverage of the incentive scheme to include developers of drone-related IT products also.
• The Government has kept the eligibility norm for MSME and startups in terms of annual sales turnover at a nominal level—INR 2 crore (for drones) and INR 50 lakh (for drone components). This will allow widening the number of beneficiaries.
• Eligibility norm for non-MSME companies in terms of annual sales turnover has been kept at INR 4 crore (for drones) and INR 1 crore (for drone components).
• For foreign companies, Rs 8 crore for drones and Rs 2 crore for drone components.