Government seeks applications from drone industry for Production Linked Incentive

New Delhi, March 12, 2022

The Ministry of Civil Aviation has sought applications from the drone industry under the Production Linked Incentive (PLI) scheme.

The PLI scheme was notified on September 30, 2021. The total incentive of Rs 120 crore is 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 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 PLI rate has been kept constant at 20% for all three years, as an exception for drones.

As per the scheme, the minimum value addition norm is at 40% of net sales for drones and drone components. The eligibility norm for MSME and startups is at nominal levels.

Coverage of the scheme includes developers of drone-related software. PLI for a manufacturer will be capped at 25% of the 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, he or she will be allowed to claim the lost incentive in the subsequent year if the shortfall is made up in the subsequent year.

The application form is of one page only, along with the certificate from the head of the organisation and the statutory auditor. More than one company within a group of companies may file separate applications under this PLI scheme and the same will be evaluated independently.

However, the total PLI payable to such applicants shall be capped at 25% of the total financial outlay under this PLI scheme.

NNN