The central government is reportedly preparing to roll out a ₹2,000 crore ($234 million) incentive scheme to boost domestic drone manufacturing and reduce dependency on imports. According to Reuters, the three-year programme will support production of drones, components, software, counter-drone systems, and related services, under the Ministry of Civil Aviation’s oversight.
The initiative comes at a time of heightened regional tensions, as India looks to counter Pakistan’s drone capabilities — developed with backing from China and Turkey — while building its own resilient supply chain.
Sources said the scheme aims to achieve at least 40% localisation of key drone components by FY28. Companies that source more parts from Indian suppliers are expected to receive additional incentives, encouraging deeper supply chain integration.
In a bid to ease the financial burden on startups and manufacturers, the Small Industries Development Bank of India (SIDBI) is also set to provide affordable loans for working capital and R&D under the new policy.
This marks India’s second major incentive programme for drones, following the ₹120 crore production-linked incentive (PLI) scheme launched in 2021, which concluded last year. A new scheme had been hinted at in late 2024, but the recent skirmishes with Pakistan appear to have accelerated its rollout.
India’s reliance on imported drones and components, often from China and Israel, has long been seen as a vulnerability, especially in defence applications. The new plan aims to close that gap while strengthening India’s position in the global drone industry, which is expected to be worth $13 billion by 2030.
Homegrown drone startups have already shown their mettle. During the recent Indo-Pak conflict, drones from IG Drones, Alpha Design Technologies, and Paras Defence & Space Technologies were deployed effectively. Startups like Tonobo supplied thermal imaging kits to support defence operations, while IG Drones secured a contract for VTOL and FPV drones.
Other players — DroneAcharya, ideaForge — have also won contracts for both defence and civilian use cases, from agriculture and healthcare to disaster response and logistics.
Recent policy moves, such as banning imported drones and relaxing Drone Rules in 2021, have already spurred activity in the sector. With the new ₹2,000 crore incentive plan on the horizon, India is doubling down on its ambition to become a global hub for drone technology — and less dependent on foreign players when it matters most.