Drone News

India Unveils ₹1,950 Crore Push to Power Homegrown Drone Industry

Posted by

Pradipta V Mukherjee

July 7, 2025

On July 7, 2025

India is getting ready to launch a ₹1,950 crore incentive program that will target both civil and military drone manufacturers in a significant policy move to improve its domestic drone capabilities. The initiative aims to counter Pakistan’s rapidly growing drone program, which has received substantial support from China and Turkey, and lessen dependency on imported components.

The ruling comes after India and Pakistan engaged in a four-day border skirmish in May during which both sides used drones extensively for the first time in direct combat. The drone arms race between the two countries has entered a new stage as a result of the conflict.

The new program will offer financial assistance for the manufacturing of drones, critical parts, cutting-edge software, counter-drone technologies, and related services over a three-year period. The development was confirmed by two government representatives and one industry source, highlighting the program’s strategic significance and breadth.

India’s previous drone Production-Linked Incentive (PLI) program, which was introduced in 2021 and failed to adequately fund early-stage domestic drone startups, is greatly overshadowed by this impending investment.

Despite being expected to spearhead the program, neither the defense ministry nor the civil aviation ministry have made any public statements. However, as part of a phased national drone development strategy, Reuters previously reported that India could invest up to $470 million (roughly ₹3,900 crore) over the next 12 to 24 months.

In recent years, India’s drone industry has advanced significantly, particularly in terms of innovation and affordability. However, for essential components like motors, sensors, and imaging systems, the industry still relies on imports, particularly from China. By the end of FY 2027–2028, the government wants to localize at least 40% of these essential elements.

Defense Secretary Rajesh Kumar Singh stated last week that “drones, loitering munitions, and kamikaze drones were widely deployed during the recent India-Pakistan clash.” “The lesson is clear: we need to accelerate indigenization and create a strong, independent military drone ecosystem.”

Even though fully assembled drones are currently prohibited in India, parts can still be purchased from other countries. Manufacturers who source these parts domestically will receive additional incentives as part of the new program.

The Small Industries Development Bank of India (SIDBI) is also anticipated to provide low-interest loans for working capital, research and development, and production scaling in order to assist the financial requirements of drone companies.

Industry estimates indicate that more than 600 Indian companies are currently involved in drone manufacturing and related activities, creating a burgeoning ecosystem that the government now intends to further empower with this incentive push.

Pradipta V Mukherjee

CEO, Mavdrones

Pradipta V Mukherjee is the visionary CEO of Mavdrones & Drone Pathshala, driving innovation and growth in the drone industry. With a passion for advanced technology, he leads the company's strategic direction, ensuring Mavdrones stays at the forefront of drone solutions. Under his leadership, Mavdrones has achieved remarkable success, including winning the 'Best Innovation and Technology in Drone Industry' award from ASSOCHAM. Pradipta is committed to revolutionizing the industry through advanced UAV technology, fostering a culture of excellence and forward-thinking within the organization.