Scindia wants to establish India as global drone hub by 2030
Civil Aviation Minister Jyotiraditya M. Scindia said the Rs.120 crore of drone PLI will be given in the next 3 years, winning an estimated Rs.5,000 crore for drone manufacturing, which, in turn, will bring a turnover of Rs.900 crore, up from Rs.60 crore as of now, and create 10,000 jobs.
The drone services industry (operations, logistics, data processing, traffic management etc.) is far bigger in scale. It is expected to grow to over Rs.30,000 crore in next three years. The drone services industry is expected to generate over five lakh jobs in three years.
The PLI amount is 1.5 times the combined size of the drone manufacturing sector, said the Civil Aviation Ministry in a release on 16 Sept 2021. It is also nearly double the combined turnover of all domestic drone manufacturers in FY 2020-21.
“Our objective is to establish India as a global drone hub by 2030,” said the Minister, underlining the Civil Aviation Ministry’s commitment to facilitate industry, service delivery and consumers in achieving the target.
The Government has agreed to keep the PLI rate constant at 20% for all three years, an exceptional treatment given only to the drone industry. For other sectors, the PLI rate reduces every year.
The proposed tenure of the PLI scheme is three years starting in FY 2021-22. The PLI scheme will be extended or re-drafted after studying its impact in consultation with the industry.
Drones offer tremendous benefits to almost all sectors of the economy. These include: agriculture, mining, infrastructure, surveillance, emergency response, transportation, geo-spatial mapping, defence, and law enforcement to name a few.
Drones can be significant creators of employment and economic growth due to their reach, versatility, and ease of use, especially in India’s remote and inaccessible areas.
Given its traditional strengths in innovation, information technology, frugal engineering and its huge domestic demand, India has the potential of becoming a global drone hub by 2030.
The Government has agreed to fix the minimum value addition norm at 40% of net sales for drones and drone components instead of 50%, another exceptional treatment given to the drone industry. This will allow widening the number of beneficiaries.
The PLI scheme covers a wide variety of drone components:
Airframe, propulsion systems(engine and electric), power systems, batteries and associated components, launch and recovery systems;
Inertial Measurement Unit, Inertial Navigation System, flight control module, ground control station and associated components;
Communications systems (radio frequency, transponders, satellite-based etc.)
Cameras, sensors, spraying systems and related payload etc.;
‘Detect and Avoid’ system, emergency recovery system, trackers etc. and other components critical for safety and security.
The list of eligible components may be expanded by the Government from time to time, as the drone technology evolves.
The Government has agreed to widen the coverage of the incentive scheme to include developers of drone-related IT products also.
The Government has kept the eligibility norm for MSME and startups in terms of annual sales turnover at a nominal level – Rs.2 crore (for drones) and Rs.50 lakhs (for drone components). This will allow widening the number of beneficiaries.
Eligibility norm for non-MSME companies in terms of annual sales turnover has been kept at Rs.4 crore (for drones) and Rs.1 crore (for drone components).
In case a manufacturer fails to meet the threshold for the eligible value addition for a particular financial year, it will be allowed to claim the lost incentive in the subsequent year if the shortfall is covered in the subsequent year.
The PLI scheme comes as a follow-through of the liberalised Drone Rules, 2021 released by the Central Government on 25 August 2021. The PLI scheme and new drone rules are intended to catalyse super-normal growth in the upcoming drone sector. #manufacturing #exports #investment #incentives /fiinews.com
