₹20,000 Crore Drone Manufacturing Scheme 2025: Key Features & Benefits | Drone Manufacturing Incentive Scheme 2025: Eligibility, Incentives & Goals | India’s ₹20,000 Crore Drone Policy: All You Need to Know | New Drone PLI Scheme 2025 | ₹20,000 Cr Incentives for Manufacturers
In a bold move to position India as a global leader in unmanned aerial systems, the Indian government has unveiled a ₹20,000 crore (approximately $234 million) incentive scheme aimed at revolutionizing domestic drone manufacturing. Launched in 2025, this ambitious program is designed to bolster the "Make in India" initiative, reduce reliance on imported drone components, and strengthen both civilian and military drone capabilities. The scheme comes at a critical juncture, as regional tensions and technological advancements underscore the strategic importance of a robust, self-reliant drone ecosystem. This article explores the key features, objectives, incentives, eligibility criteria, and potential impact of the scheme, highlighting its role in transforming India’s technological and economic landscape.
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Background and Strategic Context
India’s drone sector has witnessed rapid growth in recent years, driven by increasing applications in agriculture, defense, logistics, surveillance, and disaster management. However, the industry has faced challenges, including heavy dependence on imported components, particularly from China, and limited research and development (R&D) investment. The 2021 Production-Linked Incentive (PLI) scheme for drones, with an outlay of ₹120 crore, was a modest step toward fostering domestic manufacturing but struggled due to insufficient funding and investor interest.
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| ₹20,000 Crore Drone Scheme |
The new ₹20,000 crore scheme marks a significant escalation in India’s commitment to building a self-sustaining drone ecosystem. The initiative is partly a response to a four-day conflict with Pakistan in May 2025, which saw both nations deploy unmanned aerial vehicles (UAVs) at scale for the first time, highlighting the strategic need for indigenous drone capabilities. With Pakistan receiving drone support from China and Turkey, India’s push to counter this regional arms race underscores the scheme’s urgency. By fostering innovation and reducing import dependency, the government aims to transform the drone industry into an $18–20 billion sector by 2030.
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Drone Scheme Highlights
| Scheme Name | ₹20,000 Crore Drone Scheme to Boost Make in India Tech |
|---|---|
| Launch Year | 2025 |
| Total Outlay | ₹20,000 crore (approx. $234 million) |
| Duration | 3 years (2025–2028) |
| Primary Objective | Promote domestic drone manufacturing and achieve self-reliance |
| Key Targets |
- 40% indigenization of components by FY2028 - $18–20 billion market by 2030 |
| Eligible Entities |
- Drone manufacturers - Component suppliers - Software developers - Service providers |
| Eligibility Criteria |
- Minimum 40% value addition - ₹2 crore threshold for drones - ₹50 lakh for components |
| Financial Incentives |
- Incentives based on value addition - Low-interest, collateral-free loans |
| Job Creation |
- Over 10,000 direct jobs - 1 lakh indirect jobs by 2025 |
| Strategic Focus |
- Indigenous military drones - Counter-drone systems - Enhanced security |
| Support Measures |
- Simplified procurement (25% in single-vendor cases) - Drone testing sites |
| Export Goals | Boost exports of "Made in India" drones |
| Alignment | Supports "Make in India" and "Aatmanirbhar Bharat" initiatives |
| Challenges |
- Import dependency - Funding gaps - Global competition |
| Related Initiatives | Complements Namo Drone Didi program (₹1,261 crore) |
| Implementation | Managed by Ministry of Civil Aviation and Ministry of Defence |
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Key Features of the ₹20,000 Crore Drone Scheme
The scheme, spearheaded by the Ministry of Civil Aviation in collaboration with the Ministry of Defence, is a three-year program designed to support a wide range of activities in the drone ecosystem. Its key features include:
- Comprehensive Coverage: The initiative supports the manufacturing of drones, components, software, counter-drone systems, and related services. This holistic approach aims to create a robust supply chain and promote value addition within India.
- Localization Target: By the end of FY2028, the scheme aims to achieve at least 40% indigenization of critical drone components, such as motors, sensors, and imaging systems, which are currently sourced from China.
- Financial Incentives: Unlike the earlier PLI scheme, which offered incentives of up to 20% on value addition, the new program provides deeper financial backing to scale up production and innovation. While exact incentive rates are still being finalized, the scheme is expected to offer low-interest loans through institutions like the Small Industries Development Bank of India (SIDBI) to support startups and MSMEs.
- Support for Diverse Beneficiaries: The program targets over 600 companies currently operating in India’s drone ecosystem, including startups, MSMEs, and established manufacturers. It also encourages foreign companies to set up manufacturing units in India, aligning with the "Make in India" vision.
- Simplified Procurement and Testing: The scheme includes measures to streamline procurement processes, such as committing to procure 25% of quantities in single-vendor situations, and operationalizing drone testing sites to support manufacturers.
- Export Facilitation: Building on the 2023 liberalization of export controls for civilian drones, the scheme aims to boost India’s global competitiveness by encouraging exports of "Made in India" drones.
Eligibility and Application Process
The scheme is open to a broad range of entities, including:
- Drone Manufacturers: Companies producing complete UAVs for civilian and military applications.
- Component Suppliers: Firms manufacturing critical components like batteries, propellers, sensors, and imaging systems.
- Software Developers: Entities creating drone-related software, including navigation and counter-drone technologies.
- Service Providers: Startups and companies offering drone-based services, such as agriculture, logistics, and surveillance.
Eligibility criteria include a minimum value addition of 40% of net sales, similar to the 2021 PLI scheme, with a low threshold of ₹2 crore for drones and ₹50 lakh for components to encourage participation from smaller players. Applications are processed through the Ministry of Civil Aviation during designated PLI proposal windows, with evaluations based on production capacity and eligibility.
Incentives and Economic Impact
- The ₹20,000 crore scheme offers a range of financial and policy incentives to stimulate growth:
- Direct Financial Support:Incentives are tied to value addition, calculated as the difference between annual sales revenue (net of GST) and the purchase cost of drones and components.
- Collateral-Free Loans: Low-interest, collateral-free loans from financial institutions aim to ease the financial burden on startups and MSMEs, enabling them to scale operations.
- R&D and Innovation Support: The scheme encourages R&D by rewarding innovation and creating Indian intellectual property (IP) ownership, fostering a culture of technological advancement.
- Job Creation: The initiative is expected to generate over 10,000 direct jobs and 1 lakh indirect jobs by 2025, driven by increased investment and production.
The economic impact is already evident. The 2021 PLI scheme boosted the drone industry’s revenue from ₹88 crore in FY 2020-21 to ₹319 crore in FY 2021-22, with projections of ₹900 crore by 2025. The new scheme is expected to attract over ₹5,000 crore in investments, further accelerating growth.
Alignment with Make in India and Aatmanirbhar Bharat
The drone scheme is a cornerstone of the "Make in India" and "Aatmanirbhar Bharat" initiatives, which aim to promote self-reliance and global competitiveness. By banning drone imports in 2021 and liberalizing export rules in 2023, the government has created a conducive environment for domestic manufacturers. Companies like Marut Drones and Garuda Aerospace have benefited, with the latter planning to export 10,AZA:000 drones by the end of 2025.
The scheme also complements other government initiatives, such as the Namo Drone Didi program, which empowers women-led Self-Help Groups (SHGs) with drone technology for agricultural services. With an outlay of ₹1,261 crore, this scheme equips 14,500 SHGs with drones, generating additional income of ₹1 lakh per year per group.
Strategic and Security Implications
The scheme’s focus on military drone production is driven by national security concerns. The May 2025 India-Pakistan conflict underscored the importance of indigenous UAVs for surveillance, reconnaissance, and combat operations. By reducing reliance on Chinese components, India aims to safeguard its supply chain and enhance strategic autonomy. The inclusion of counter-drone systems in the scheme further strengthens India’s defense capabilities against emerging threats.
Challenges and the Road Ahead
Despite its promise, the scheme faces challenges:Import Dependency: India still relies on China for critical components, and achieving 40% indigenization by FY2028 will require significant R&D investment.
- Funding Gaps: The 2021 PLI scheme struggled due to limited investor interest, and the new program must ensure adequate funding for startups.
- Global Competition: Competing with established drone markets like China and the U.S. requires innovation and economies of scale.
To address these, the government is urged to streamline the Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) licensing process and provide clarity on export regulations. Collaboration between ministries, industry, and startups will be crucial to realizing India’s vision of becoming a global drone hub by 2030.
Conclusion
The ₹20,000 crore drone scheme is a game-changer for India’s technological and economic ambitions. By fostering innovation, reducing import dependency, and creating jobs, it aligns with the "Make in India" vision while addressing strategic imperatives. With over 600 companies poised to benefit and a target of $18–20 billion by 2030, the scheme positions India as a formidable player in the global drone market. As the nation navigates regional challenges and global competition, this initiative is a critical step toward self-reliance and technological leadership, ensuring that "Made in India" drones soar high on the world stage.
₹20,000 Crore Drone Scheme FAQ
Q. What is the ₹20,000 Crore Drone Scheme?
The ₹20,000 Crore Drone Scheme is a government initiative launched in 2025 to promote domestic drone manufacturing in India. Aimed at boosting the "Make in India" initiative, it provides financial incentives, support for R&D, and infrastructure development to create a self-reliant drone ecosystem for civilian and military applications.
Q. What are the main objectives of the scheme?
- The scheme aims to:Reduce dependency on imported drone components.
- Achieve 40% indigenization of critical components by FY2028.
- Create over 10,000 direct and 1 lakh indirect jobs.
- Position India as a global leader in the drone industry with a target market size of $18–20 billion by 2030.
- Enhance national security through indigenous military drone capabilities.
Q. Who is eligible to participate in the scheme?
- Eligible entities include:Drone manufacturers (civilian and military).
- Component suppliers (e.g., batteries, sensors).
- Software developers (e.g., navigation, counter-drone systems).
- Service providers (e.g., agriculture, logistics).
- Participants must achieve a minimum value addition of 40% of net sales, with thresholds of ₹2 crore for drones and ₹50 lakh for components.
Q. What kind of incentives are offered?
- The scheme offers:Financial incentives based on value addition.
- Low-interest, collateral-free loans for startups and MSMEs.
- Support for R&D and innovation to foster Indian IP ownership.
- Simplified procurement and export facilitation.
Q. How can companies apply for the scheme?
Applications are processed through the Ministry of Civil Aviation during designated PLI proposal windows. Companies must submit details on production capacity and eligibility, with evaluations conducted based on these criteria.
Q. How does the scheme support the "Make in India" initiative?
It encourages local manufacturing by banning drone imports, offering incentives for indigenization, and supporting over 600 companies to produce drones and components domestically. It also facilitates exports of "Made in India" drones, aligning with global competitiveness goals.
Q. What is the role of the scheme in national security?
The scheme focuses on developing indigenous military drones and counter-drone systems, reducing reliance on foreign technology. This is critical following the May 2025 India-Pakistan conflict, which highlighted the need for self-reliant UAV capabilities.
Q. How will the scheme impact job creation?
It is projected to generate over 10,000 direct jobs and 1 lakh indirect jobs by 2025, driven by increased manufacturing, R&D, and related services across the drone ecosystem.
Q. How does the scheme relate to other government programs?
It complements initiatives like the Namo Drone Didi program (₹1,261 crore), which equips women-led SHGs with drones for agricultural services, and builds on the 2021 PLI scheme for drones, scaling up its scope and funding.