The Production-Linked Incentive (PLI) Scheme for drones and drone components has been notified on 30th September, 2021 to push the production of drones. 

An incentive of Rs. 120 crore has been provided for Indian manufacturers of drone and drone components on the basis of their value addition in India. The value addition by a manufacturer will 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. The incentive shall be provided over three financial years commencing from 2021-22. 

The PLI that can be claimed by a manufacturer is 20% of the value addition by such manufacturer. The PLI rate is constant at 20% for all three years. Minimum value addition is specified as 40% of net sales. PLI for a beneficiary is capped at 25% of the total annual outlay to allow widening of the number of beneficiaries. 

Eligibility norm for Micro, Small and Medium Enterprises (MSME) and startups is specified as Rs. 2 crore of annual sales revenue for drone manufacturers and Rs. 50 lakh of annual sales revenue for drone component manufacturers. 

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 the manufacturer makes up the shortfall in the subsequent year. The liberalised Drones Rules, 2021 notified on 25 August 2021 provide the regulatory framework for owning and operation of drones. These rules cover various aspects like type certification, registration and operation of drones, airspace restrictions, research, development and testing of drones, training and licensing, offences and penalties etc.