The Production Linked Incentive (PLI) Scheme for drones provides incentives of up to Rs. 120 crore over three financial years (FY 2021–22 to FY 2023–24) for eligible drone and component manufacturers in India. It is accessed through an application-based selection process under the Ministry of Civil Aviation with eligibility based on value addition norms.
Applicants can apply through the official government portal by submitting production, turnover, and compliance details for verification against scheme criteria.
In summary
- The PLI scheme for drones is a Government of India initiative launched by the Ministry of Civil Aviation to promote domestic drone manufacturing and reduce import dependence. It carries a total incentive outlay of Rs. 120 crore across three financial years.
- Incentives are linked to 20% of value addition, calculated as net sales minus purchase cost of eligible drone products and components.
- A minimum 40% domestic value addition is required for eligibility under the scheme framework.
- MSMEs and start-ups are eligible with minimum turnover thresholds of Rs. 2 crore for drone manufacturers and Rs. 50 lakh for component manufacturers.
- The scheme is designed to strengthen India’s drone ecosystem under regulated oversight of the Directorate General of Civil Aviation (DGCA).
What is the PLI Scheme for Drones?
The Production Linked Incentive (PLI) Scheme for drones is a performance-based incentive programme introduced by the Government of India under the Ministry of Civil Aviation. It aims to encourage domestic manufacturing of drones and drone components by offering financial incentives linked directly to value addition within India.
The scheme has a total outlay of Rs. 120 crore spread across three financial years from FY 2021–22 to FY 2023–24. It rewards manufacturers based on incremental domestic value creation rather than fixed subsidies. The Directorate General of Civil Aviation (DGCA) regulates the operational and safety ecosystem for drones, ensuring compliance alongside manufacturing growth.
Objectives of the production linked incentive scheme for drones
- To reduce dependence on imported drones and components by promoting domestic manufacturing.
- To increase value addition within India through local production of hardware, software, and drone subsystems.
- To encourage participation from start-ups, MSMEs, and established manufacturers in the drone ecosystem.
- To strengthen India’s global competitiveness in unmanned aerial systems and related technologies.
- To generate employment in advanced manufacturing sectors such as avionics, propulsion systems, and sensors.
- To support innovation aligned with safety and operational standards issued by the Directorate General of Civil Aviation (DGCA).
Eligibility criteria for the PLI scheme for drones and drone components
- The applicant must be a registered company engaged in manufacturing drones or drone components in India.
- The entity must meet minimum annual sales thresholds defined under scheme guidelines issued by the Ministry of Civil Aviation.
- Only manufacturing activities are eligible; trading or pure assembly operations are excluded.
- A minimum 40% domestic value addition is required for eligibility.
- MSMEs and start-ups are eligible if they meet turnover thresholds of Rs. 2 crore for drones and Rs. 50 lakh for components.
- The company must comply with DGCA safety, certification, and operational standards.
- Applicants must maintain audited financial records for verification and compliance review.
- Entities must not be blacklisted or involved in regulatory violations.
Incentive rates and financial benefits under the PLI scheme for drones
| Category | Incentive structure | Eligibility basis | Duration | Key benefit |
|---|---|---|---|---|
| Drone manufacturers | 20% of value addition | Minimum turnover threshold + compliance requirements | FY 2021–22 to FY 2023–24 | Encourages domestic production scale-up |
| Component manufacturers | 20% of value addition | Lower MSME thresholds (Rs. 50 lakh) | Scheme period | Strengthens local supply chain |
| Start-ups & MSMEs | Priority inclusion within eligibility limits | Rs. 2 crore / Rs. 50 lakh thresholds | Fixed policy window | Enables early-stage participation |
| Export-linked production | Covered under value addition framework | DGCA-compliant output | Scheme cycle | Improves global competitiveness |
The scheme ensures incentives are directly linked to measurable domestic value creation rather than fixed capital support, making production performance the core determinant.
Eligible drone categories and components under the PLI scheme
- Complete drone systems used in commercial, agricultural, and industrial applications.
- Airframes and structural components used in unmanned aircraft systems.
- Propulsion systems including motors, engines, and power units.
- Navigation and flight control systems such as GPS modules and IMUs.
- Sensors, cameras, and payload systems for aerial data applications.
- Battery systems and energy storage units designed specifically for drones.
- Software systems for autonomous flight, mapping, and control.
- Sub-components used in drone assembly and integration.
How to apply for the PLI scheme for drones: step-by-step process
- Visit the official Ministry of Civil Aviation application portal for the PLI scheme.
- Register the company using CIN, GST, and incorporation details.
- Submit manufacturing details for drones or components.
- Upload audited financial statements for eligibility verification.
- Provide compliance documents aligned with DGCA regulations.
- Declare domestic value addition in manufacturing processes.
- Applications are evaluated by a committee under the Ministry of Civil Aviation.
- Shortlisted applicants receive approval and eligibility confirmation.
- Approved entities must submit periodic production reports.
- Incentives are released based on verified value addition and compliance.
Documents required to apply for PLI scheme for drones in India
- Certificate of incorporation of the company.
- GST registration certificate.
- Audited financial statements.
- Manufacturing plan for drones or components.
- DGCA compliance certificates.
- Production capacity documentation.
- Board resolution authorising application.
- Sales and export records, if applicable.
PLI scheme for drones vs other PLI schemes
| Feature | Drone PLI scheme | Other PLI schemes |
|---|---|---|
| Sector focus | Drones and unmanned aerial systems | Electronics, automotive, telecom, pharmaceuticals |
| Incentive basis | 20% value addition-linked incentive | Sector-specific production-linked incentives |
| Total outlay | Rs. 120 crore | Multi-sector allocations in thousands of crores |
| Regulatory authority | Ministry of Civil Aviation + DGCA | Respective line ministries |
| Industry maturity | Emerging sector | Mature manufacturing sectors |
| Eligibility scope | Lower thresholds for MSMEs and start-ups | Higher thresholds in some sectors |
Pros and cons of the PLI scheme for drones for Indian manufacturers
Pros
- Encourages domestic drone manufacturing and reduces import dependence.
- Provides performance-linked incentives rather than fixed subsidies.
- Supports MSMEs and start-ups through lower entry thresholds.
- Strengthens India’s drone supply chain ecosystem.
- Aligns with DGCA regulatory and safety framework.
Cons
- Strict compliance and documentation requirements increase administrative burden.
- Incentives depend on production performance, creating revenue uncertainty.
- Limited total outlay of Rs. 120 crore restricts scale.
- Value addition calculations require detailed auditing and verification.
Conclusion
The PLI scheme for drones supports India’s goal of building a self-reliant manufacturing ecosystem by linking incentives directly to domestic value addition and production performance. It promotes localisation in the drone sector while ensuring regulatory compliance under the Directorate General of Civil Aviation (DGCA).
Businesses exploring growth opportunities can also consider financing options such as business loans, compare business loan interest rates, or plan repayments using a business loan EMI calculator.
