An incentive of Rs. 120 crore has been provided for Indian manufacturers of drone and drone components on the basis of their value addition in India, 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 incentive is spread over three financial years commencing from 2021-22.
The Production-Linked Incentive (PLI) Scheme for drones and drone components was notified on Sept 30, 2021 to promote the manufacturing of drones and drone components in India.
The PLI that can be claimed by a manufacturer is 20% of the value addition by such manufacturer. The PLI rate is constant at 20% for all three years. Minimum value addition is specified as 40% of net sales.
Eligibility norm for Micro, Small and Medium Enterprises (MSME) and startups is specified as Rs. 2 crore of annual sales revenue for drone manufacturers and Rs. 50 lakhs of annual sales revenue for drone component manufacturers. PLI for a beneficiary is capped at 25% of the total annual outlay to allow widening of the number of beneficiaries.
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 incentive under the PLI scheme is applicable only on domestic value addition and will encourage manufacturers to reduce imports and go for higher capacity building and value addition in the sector. This information was given by the Minister of State in the Ministry Of Civil Aviation (Gen.) (Dr) V. K. Singh (Retd) in a written reply to a question in Lok Sabha today.
