PLI scheme for drones to boost sector, encourage entrepreneurs: DFI

It said the PLI scheme offers an incentive of 20 per cent to the manufacturers of drones and developers of drone-related software on their value addition, which will be calculated as the net sales minus the purchase cost of drone components used therein.

The production-linked incentive (PLI) scheme for the drones segment will encourage entrepreneurs to strive towards building drones, components and software for the global market, industry body DFI said on Wednesday.

The central government's move comes close on the heels of the liberalised Drone Rules, 2021 notified by the civil aviation ministry late last month.

The Union government on Wednesday approved a PLI scheme for drones and drone components with an allocation of Rs 120 crore spread over three financial years.

''As India strides towards becoming the next big power in the drone sector, the government's decision of approving the PLI scheme for drones and drone components shall encourage entrepreneurs to strive towards building drones, components, and software for the global industry. ''The very fact that the PLI scheme for drones offers an incentive as high as 20 per cent...to the manufacturers and software developers signifies that the government will leave no stone unturned to support the drone industry,'' Smit Shah, Director, Drone Federation of India (DFI) said in a release. This scheme is yet another ''masterstroke'' towards realising Prime Minister Narendra Modi's vision of an Atmanirbhar Bharat, he added. DFI claims to represent over 2,000 drone pilots, 120 service providers, 90 manufacturers and 10 training organisations.

RattanIndia Enterprises, which recently announced strategic investment in US-based drone company Matternet, said the PLI scheme addresses the strategic, tactical and operational uses of this revolutionary technology. A product specific PLI scheme for drones with clear revenue targets and focus on domestic value addition is key to building capacity and making these key drivers of India's growth strategy, it said in a statement. ''It (the PLI scheme) will be a big boost to this sunrise sector which has the potential to transform almost all sectors of the economy,'' said Anjali Rattan Nashier, Business Chair, RattanIndia Enterprises Ltd. The new PLI scheme and Drone Rules are intended to promote growth in the upcoming drone sector which is expected to tap a market potential of over Rs 50,000 crore in the next five years, DFI said. The Indian drone industry is also projected to generate over 5 lakh jobs as DaaS (Drone as a Service) companies start permeating major public and private organisations across agriculture, mining, infrastructure, law enforcement sectors, making it one of the fastest-growing technological industries in the country, it stated. It said the PLI scheme offers an incentive of 20 per cent to the manufacturers of drones and developers of drone-related software on their value addition, which will be calculated as the net sales minus the purchase cost of drone components used therein. The minimum value addition norm has been fixed at 40 per cent of net sales instead of 50 per cent as in other PLI schemes, it said, adding the proposed tenure of the scheme is three years starting from FY 2021-22. The incentive rate has been kept constant at 20 per cent for all three years, instead of a reduction each year, considering that the industry is in a nascent stage.

Drone sector is a key priority area for the government and has been given preferential treatment to help achieve the goal of making India a global drones hub by 2030, RattanIndia Enterprises said in the release. With this PLI scheme, drone services such as operations, logistics, data processing, traffic management, among others, are likely to grow to Rs 30,000 crore in next three years and generate over 5 lakh jobs, the company said.

Besides investment in the US company, RattanIndia Enterprises has also announced incorporation of a wholly-owned subsidiary for the drones business in India.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)