Production Linked Incentive (PLI) Scheme for Drones and Drone Components

What was the PLI Scheme for Drones and Drone Components?

The Production Linked Incentive (PLI) Scheme for Drones and Drone Components was a central scheme of the Ministry of Civil Aviation, with a total outlay of Rs 120 crore over three financial years, FY 2022-23 to FY 2024-25. According to PIB and the Ministry of Civil Aviation, it rewarded Indian manufacturers of drones and drone components with an incentive tied to the value they added in India.

The scheme was designed to make India a global drone hub by giving early support to a young industry. It deliberately set low turnover thresholds so that MSMEs and start-ups, which make up most of the sector: could qualify. The PLI Scheme for Drones and Drone Components was notified on 30 September 2021, and the Ministry of Civil Aviation approved the operational guidelines soon after. The incentive was spread over three financial years and the scheme period has now ended.

Main objectives

• Promote domestic manufacturing of drones and drone components.
• Support MSMEs and start-ups in the drone sector with accessible thresholds.
• Reward value addition done within India.
• Reduce import dependence for drones and their components.

How much did the scheme provide?

The incentive was straightforward: 20% of a manufacturer's value addition, where value addition was defined as annual sales revenue from drones and drone components (net of GST) minus the purchase cost of drones and drone components (net of GST).

To spread support across more firms, the PLI for any single beneficiary was capped at 25% of the total annual outlay. This prevented one large company from absorbing most of the Rs 120 crore, and the value-addition basis rewarded firms that manufactured, rather than merely assembled or traded.

Two design features made the drone PLI unusually friendly to small firms compared with other PLI schemes:

• A constant incentive rate. The 20% rate was held constant for all three years, so a manufacturer could plan its investment knowing the incentive would not taper.
• A widened base of beneficiaries. By capping any one firm at 25% of the annual outlay and setting very low turnover thresholds, the scheme spread its Rs 120 crore across many manufacturers rather than a few large ones.

The scheme also covered drone components: such as airframes, propulsion systems, flight-control modules, sensors, cameras, avionics and communication systems, recognising that a domestic drone industry needs a domestic component base beneath it, much as electronics assembly needs a component ecosystem.

A further design safeguard was a minimum value-addition floor of 40% of net sales. This meant a firm could not qualify by importing near-complete drones and merely re-badging them; a genuine share of the manufacturing value had to happen in India before the 20% incentive applied. Together with the value-addition basis for the payout itself, this floor steered the scheme's money towards firms that actually built drones and components domestically.

Who was eligible for the Drones PLI Scheme?

Eligibility turned on annual sales turnover, with lower thresholds for smaller firms:

A company could apply if it:

• Was a company, LLP or firm registered in India making drones or drone components.
• Met the minimum annual sales turnover threshold for its category.
• Achieved at least 40% value addition on net sales in India.
• Could compute and substantiate its value addition net of GST.

You are not eligible if:

• You are an individual, drone pilot or job seeker seeking a personal grant — the scheme had no individual benefit of any kind.
• Your firm did not meet the minimum turnover threshold.
• You are applying now: the scheme period (FY 2022-23 to FY 2024-25) has closed.

Anyone offering personal "drone PLI registration" to individuals for a fee is running a scam, the scheme had no citizen application, and it is now closed.

How did companies apply for the Drones PLI Scheme?

While the scheme was open, the process was for companies only and was handled by the Ministry of Civil Aviation:

1. Confirm the company met the annual sales turnover threshold for its category (MSME/start-up or non-MSME) for drones or drone components.
2. Register as an applicant with the Ministry of Civil Aviation under the scheme guidelines and prepare audited financial statements.
3. Compute value addition as sales revenue (net of GST) minus purchase cost (net of GST) of drones and drone components.
4. Submit the application with the value-addition computation and supporting documents for the relevant financial year.
5. Approved manufacturers claimed an incentive of 20% of value addition, subject to the 25%-of-annual-outlay cap per beneficiary.

Why a manufacturer's PLI claim could be reduced or rejected

Even for an eligible company, the incentive was not automatic. A claim could be scaled down or disallowed for reasons that trace directly back to the scheme's design:

• Value addition below the 40% floor. A firm that imported most of the drone and added little in India failed the minimum value-addition test and did not qualify for that year.
• Turnover below the category threshold. A component maker under Rs 50 lakh (MSME) or a drone maker under Rs 2 crore (MSME) simply did not meet the entry bar for the year in question.
• The 25%-of-annual-outlay cap. A large manufacturer's computed 20% incentive could exceed the per-beneficiary ceiling, in which case the claim was limited to the cap.
• Unsubstantiated value-addition computation. Claims that could not be tied to audited financials, or that mixed in revenue from non-drone lines, were pared back to the verifiable figure.
• Misclassified products. Revenue from items outside the defined list of drones and eligible components did not count towards the incentive.

What is the status of the scheme?

The scheme period ran from FY 2022-23 to FY 2024-25 and has closed. According to government updates, drone makers availed only part of the funds earmarked in the early years as the young industry scaled up. Fresh applications are not being accepted under this scheme.

Companies interested in current support for drone manufacturing should check directly with the Ministry of Civil Aviation for any successor or expanded programme, rather than relying on third parties claiming the original PLI is still open or offering personal enrolment.

How did the Drones PLI fit with other drone policies?

The PLI scheme sat alongside a wider push to build India's drone sector. It was a manufacturing incentive, and it complemented; rather than replaced, the regulatory and operational reforms of the period, such as the liberalised Drone Rules and the airspace map that made it easier to fly drones legally. In other words, the PLI addressed the supply side (making drones and components in India), while the rules addressed use (flying them safely).

For a manufacturer, this meant the PLI incentive was only one piece of the picture: eligibility also depended on making a genuinely value-added product, and selling drones commercially still required compliance with the Ministry of Civil Aviation and DGCA framework. A firm relying on the PLI alone, without a viable product and regulatory compliance, would not have benefited.

Help and how to verify

• Official information and guidelines: the Ministry of Civil Aviation website.
• Scheme announcements and outlay details: PIB press releases.

Because the scheme has closed, there is no live application and no citizen helpline. Treat any person, call or website that asks an individual to "register" or pay a fee for the drone PLI as fraudulent, and verify any claim of a successor scheme directly with the Ministry of Civil Aviation before acting.