Government approves Rs 26058 crore PLI scheme for auto and drone sector

Vaishnavi Desai
New Update
Drones Budget 2022

The Union Cabinet of India on Wednesday approved the Production Linked Incentive Scheme for the automobile and drone Industry with a budgetary outlay of ₹ 26,058 crore. The PLI scheme for the auto sector will incentivize high value Advanced Automotive Technology vehicles and products.


PLI Scheme for Automobile Industry and Drone Industry is part of the overall announcement of PLI Schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of ₹ 1.97 lakh crore. With the announcement of PLI Schemes for 13 sectors, minimum additional production in India is expected to be around ₹ 37.5 lakh crore over 5 years and minimum expected additional employment over 5 years is nearly 1 crore.

The PLI Scheme for the auto sector envisages to overcome the cost disabilities to the industry for manufacture of Advanced Automotive Technology products in India. The incentive structure will encourage industry to make fresh investments for indigenous global supply chain of Advanced Automotive Technology products.

This PLI Scheme for automotive sector along with the already launched PLI scheme for Advanced Chemistry Cell (ACC) (₹18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles (FAME) (₹10,000 crore) "will enable India to leapfrog from traditional fossil fuel based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system," the statement mentioned.


"The PLI for Drones and Drone components industry, will over a period of three years, lead to investments worth ₹ 5,000 Crore, increase in eligible sales of ₹ 1500 crore and create additional employment of about 10,000 jobs," the statement further added. The PLI Scheme for the Drones and Drone components industry "addresses the strategic, tactical and operational uses of this revolutionary technology." A product specific PLI scheme for drones with clear revenue targets and focus on domestic value addition is key to building capacity and making these key drivers of India’s growth strategy.

“Drone sales and popularity have continued to increase in India with the support of the liberalised rules. Application of drones will soon cuts across various sectors construction, delivery, law enforcement, media and entertainment, precision agriculture, surveying and mapping, and inspection and monitoring. The PLI scheme along with the liberalised drone rules, 2021 issued by the government on 25th August 2021 will help realise this growth potential," Swapnik Jakkampudi, Co-Founder, Skye Air Mobility said.

"Given the demand and under the favourable climate, India  has  the  potential  of  becoming  a  global  drone  hub  by  2030.  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  supernormal  growth  in  the  upcoming  drone  sector," said Ankit Kumar ,Founder Alternative Global India.

"And now the industry will boast of big numbers. Thanks  to  the  new  rules  and  the  incentive  scheme,  the  drones  and  drone  components manufacturing  industry  may  see  an  investment  of  over  INR  5,000  crore  over  the  next  three years.    The  annual  sales  turnover  of  the  drone  manufacturing  industry  may  grow  from  INR  60 crore  in  2020-21  fold  to  over  INR  900  crore  in  FY  2023-24.   The  drone  manufacturing  industry is  expected  to  generate  over  10,000  direct  jobs  over  the  next  three  years.     The  drone  services  industry  (operations,  logistics,  data  processing,  traffic  management  etc.)  is far  bigger  in  scale.    It  is  expected  to  grow  to  over  INR  30,000  crore  in  next  three  years.  The  drone services  industry  is  expected  to  generate  over  five  lakh  jobs  in  three  years."