India has the potential to become a global drone hub by 2030, according to Union civil aviation minister Jyotiraditya Scindia. This was mentioned by him during the launch of NITI Aayog’s Experience Studio on Drone, an initiative to promote an ecosystem aimed at innovation and adoption of drones for public services.
The minister added that the three wheels to oversee the success of this achievement, are an appropriate policy, creating incentives such as a launching product-linked incentives (PLI) for drone production, and creating demand for them across different central ministries including agriculture, mining, and rural. While on the other hand, Drones Literacy will be expanded through Drone Shakti and Kisan Drones.
He also mentioned that another requirement for this milestone is the necessity to develop at least 100,000 drone pilots. In line with this, close to 20 drone schools have been certified across 12 states in the country.
According to Scindia, the government will enable the continuity of this accelerated drone adoption by partnering with stakeholders from the industry, easing regulations, and spreading literacy of the technology through programs such as Drone Shakti and Kisan Drones.
The development of 100 new cargo terminals in the next 3 years will also add to the growth of Drones enabled to use for cargo deliveries within the terminals and terminals to delivery locations.
According to sources, the drone market in India is expected to grow at a CAGR of 20.9 per cent during 2020-2026.
Product-Linked Incentives (PLI)
Drone makers and service providers have already been ramping up their product offerings and hiring to meet a spurt in demand that is envisioned to accelerate in line with the government’s Production Linked Incentive (PLI) scheme, planned to further bring down drone prices.
PLI scheme was notified on 30th September 2021. The total incentive is INR 120 crore spread over three financial years, which is nearly double the combined turnover of all domestic drone manufacturers in FY 2020-21.The PLI rate is 20% of the value addition, one of the highest among PLI schemes. The value addition shall be calculated as the annual sales revenue from drones and drone components (net of GST) minus the purchase cost (net of GST) of drone and drone components. PLI rate has been kept constant at 20% for all three years, an exceptional treatment for drones.
As per the scheme, Minimum value addition norm is at 40% of net sales for drones and drone components instead of 50%, an exceptional treatment for drones. Eligibility norm for MSME and startups is at nominal levels.
Coverage of the scheme includes developers of drone-related software also. PLI for a manufacturer shall be capped at 25% of total annual outlay. This will allow widening the number of beneficiaries.In case a manufacturer fails to meet the threshold for the eligible value addition for a particular financial year, the manufacturer will be allowed to claim the lost incentive in the subsequent year if she makes up the shortfall in the subsequent year.
Union Finance Minister Nirmala Sitharaman had announced ‘Drone Shakti’ while presenting the Union Budget 2022 focused on the expansion of emerging technologies and Drone. Earlier in 2021, the Centre had liberalised the Drone Rules.
During the budget speech in February, 2022, Finance Minister Nirmala Sitharaman said that drone start-ups would be encouraged as India steps up the commercial use of drones in different industries as part of its Drone Shakti.
Consumers use drones for a variety of needs from photography, agriculture, and construction to public safety and security. Hence, use drones with advanced capabilities enhance the productivity. The government’s steps will promote to facilitate ‘Drone Shakti‘ through varied applications and for ‘Drone-As-A-Service (DrAAS)’.
Given that new technologies are expensive or that most customers do not understand their use, DRaaS allows service providers to transfer the benefits of the technology to customers in all segments without investing in capital costs.
The Drone Shakti scheme and the INR 120 crore PLI scheme for drone and drone components will help increase domestic manufacturing and create employment. The fundamental aim of the industry is to generate a supplier ecosystem for the industry in India.
The government will encourage the rate of drone adoption among different sectors, by partnering with the industry’s stakeholders and one of the main sector is the agriculture sector.
The government has also permitted drones to be used in the agricultural sector which involves the use of drones in spraying insecticides and nutrients.
The announcement to promote the use of ‘Kisan drones’ in the agricultural sector as part of the Budget for 2022-23 will enable the drone industry to collaborate with our farmers to improve operational efficiency and maximize profitability which will help to make India’s agricultural sector future ready.