hometechnology NewsDrone PLI scheme: Here’s a look at the challenges and opportunities
technology | Dec 6, 2022 10:29 PM IST

Drone PLI scheme: Here’s a look at the challenges and opportunities

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India wants to house a $1.8 billion drone industry by 2026. That's where its Rs 120 crore rupee Production-Linked Incentive Scheme (PLI) comes in. A little over a year since the scheme was first notified, operational guidelines have been finalised. That's good news for the 12 drone manufacturers and 11 component manufacturers who have been shortlisted over two rounds of applications.

Drones, are touted as the next big thing. A Market Research Future Report says that the global drone market, currently valued at over $45 billion, is expected to grow at a Cumulative Average Growth Rate (CAGR) of 13 percent by 2030. And India has big plans to be a part of this growth.

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India wants to house a $1.8 billion drone industry by 2026. That's where its Rs 120 crore Production-Linked Incentive (PLI) Scheme comes in. A little over a year since the scheme was first notified, operational guidelines have been finalised. That's good news for the 12 drone manufacturers and 11 component manufacturers who have been shortlisted over two rounds of applications.
Nikunj Parashar, Co-Founder of Sagar Defence Engineering said, “If you look at companies like us or bigger players like Ideaforge or Asteria, people are investing. We ourselves are investing close to Rs 50 crore in setting up a separate facility right now.”
Agnishwar Jayaprakash, Founder of Garuda Aerospace said, “We are very confident by March 2023, we would be able to manufacture and sell at least 2000-2500 drones.”
But challenges are bound — the biggest by far being stiff competition from China. In February, India banned the import of drones, and limited imported drone use to R&D, defence, and security purposes. It also allowed the free import of drone components, to help Indian assemblers and drone makers. Even so, players say achieving milestones will take time.
“We say we have more than 300 plus drone companies in India, but unfortunately it's the assembly people that are actually outsourcing items and bringing and assembling them. So turning into a pure manufacturing hub and seeing those investments, we should look at five years down the line,” Parashar said.
The Defence Ministry is also helping. It has increased its preference for indigenous drones. However, players say the large, and rapidly growing, the consumer-centric market is proving tough to crack, because of the cost advantage enjoyed by Chinese players.
Aakash Sinha, Founder & CEO of Omnipresent Robot Tech said, “Most of the defence tenders that we have seen clearly mention that they want Made in India drones or they have a strong preference for that. So selling to defence, hasn't created much difference but in terms of selling to consumers as well as for semi-professional work, it's very difficult for Indian companies to match that type of price point.”
Drone smuggling is also hurting.
“If you look at the number of illegal drones in the market, it would be more than seven to eight lakh drones but the number of manufacturers in the country is hardly between 75 and 100 and out of which less than 20 to 25 have been granted PLI access,” Jayaprakash said.
Measures to streamline the bureaucracy have only had limited effect.
Pankaj Akula, CEO of Paras Aerospace said, “We are in a phase where approved drones by the government stand at only five, out of which three are agri and two are general purpose training drones. The number of applications that have been resubmitted by the total number of companies will be more than 30, which are going for resubmission again and again. So this is taking a lot of time.”
The government hopes the PLI scheme will attract Rs 5,000 crore in investments, and create 10,000 jobs. These are key to meeting India’s target of becoming a drone manufacturing hub by 2030. The industry says the government is showing intent through its policies and schemes. But the flight path promises to be a tough one — given India’s drone market has seen revenues of around $20 million in 2022, compared to China's $1.2 billion.
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