Production-Linked Incentive (PLI) 2.0 Scheme

December 4, 2024

The Government of India is planning to introduce a new Production-Linked Incentive (PLI) 2.0 scheme, which aims to encourage a self-sustaining drone ecosystem. It focuses on local production of drones and their components and also promotes services related to drones, such as leasing and software sales. Currently, portion of drone parts, around 50-60%, is imported, which aims to reduce this reliance on imports.

Objectives of PLI 2.0

The primary goal is to enhance domestic drone manufacturing, which targets a reduction in imports, aiming for 30% of total drone value to be produced locally. This will strengthen the local economy and create jobs and also seeks to establish India as a major player in the global drone market.

Funding and Incentives

The proposed funding for this scheme is approximately ₹1,000 crore. Incentives will be calculated based on a percentage of the sale value of drones. Additional incentives will consider the value added and local parts used in production. This structure encourages manufacturers to increase local sourcing.

Coverage of the Scheme

PLI 2.0 will encompass more than just drone parts manufacturing. It will also include drone leasing and software sales. This broad approach aims to create a comprehensive ecosystem for drones in India. The scheme intends to support various sectors, including defence, agriculture, and surveillance.

Current Landscape of Drone Manufacturing

India hosts around 300 drone manufacturers. These companies produce drones for diverse applications. The demand for drones is rising, particularly in agriculture and infrastructure sectors. The new PLI scheme will replace the previous initiative launched in 2021.

The earlier PLI scheme offered incentives of ₹120 crore over three financial years. It was focused on manufacturers based on their added value in India. PLI 2.0 aims to build on the successes and lessons learned from this earlier programme.

Important Facts for Exams:
PLI 2.0 – The Production-Linked Incentive 2.0 scheme aims to boost domestic drone manufacturing. It targets reduction in imports, aiming for 30% local production of total drone value.
₹1,000 crore – The proposed funding for the PLI 2.0 scheme is approximately ₹1,000 crore. This financial support aims to encourage local manufacturing and reduce dependence on imported drone parts.
Drone Leasing – The PLI 2.0 scheme includes drone leasing services. This expansion aims to create a comprehensive ecosystem for drones, enhancing their utilisation across various sectors in India.
300 Manufacturers – India currently has around 300 drone manufacturers. These companies produce drones for diverse applications, including agriculture, defence, and surveillance, reflecting the growing demand in these sectors.

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