India's PLI Scheme for Drones Has Created a Domestic Industry Where None Existed Two Years Ago

The PLI Scheme Has Done in Two Years What Market Development Alone Would Have Taken a Decade to Achieve

India's Production-Linked Incentive scheme for drones, notified in September 2021 with an approved outlay of INR 120 crore across three financial years, was designed to create domestic drone manufacturing capacity by linking cash incentives to production value growth. The scheme's eligibility requirements , defined by indigenous content percentages and production value thresholds for drone manufacturers and drone components manufacturers , were calibrated to attract serious manufacturing investment rather than assembly operations. The Ministry of Civil Aviation's data through March 2025 documents that PLI-registered drone manufacturers collectively achieved over INR 1,100 crore in approved sales value against INR 120 crore in disbursed incentive, generating a production-to-incentive leverage of approximately 9:1 that industry observers and policymakers both cite as evidence of the scheme's effectiveness.

The drone industry that existed in India before the PLI scheme consisted primarily of import-dependent assemblers and a handful of research-stage startups with limited commercial production. ideaForge Technology, which had been developing UAV platforms for defence and surveillance since 2011, was the most credible domestic manufacturer at PLI notification. The scheme catalysed the entry of Garuda Aerospace, Throttle Aerospace, Asteria Aerospace, and over 50 additional drone manufacturers into formal production within 24 months. Several of these entrants are backed by established aerospace and defence companies who identified the PLI framework as a reliable demand signal: Mahindra Defence, Paras Aerospace, and Tata Advanced Systems have all made drone manufacturing investments that are structured around PLI-linked production commitments.

Agriculture Drones Are the Volume Market That Is Defining Indian Commercial UAV Adoption

India's agricultural sector , which employs approximately 43 percent of the workforce and covers 140 million hectares of net sown area , represents the largest addressable market for drone services in the Indian context. The Government of India's Kisan Drone initiative, launched in 2022 with direct subsidies for agricultural drone procurement covering 40-to-100 percent of equipment cost depending on farmer category, created immediate demand that PLI-stimulated domestic manufacturers were positioned to supply. Garuda Aerospace's Kisan drone platform, specifically designed for pesticide and nutrient spraying applications in Indian field conditions, has achieved commercial deployment across multiple states with State government procurement contributing to volume.

The agricultural drone services market in India is evolving from equipment sale toward service-based models. Custom Hiring Centres , government-supported shared equipment pools where multiple farmers can access machinery at service rates rather than ownership cost , are being adapted for drone services through the agricultural drone initiatives of multiple state governments. The Tamil Nadu Agricultural University's drone technology centre and similar institutions in Andhra Pradesh and Karnataka are training agricultural drone operators and developing crop-specific application protocols that will standardise drone agrochemical application across India's diverse crop and climate environments. The penetration rate of drone-based crop management in India remains below 2 percent of total cultivated area as of 2025 , a statistic that illustrates both the immaturity of the market and the scale of the growth opportunity as awareness, operator supply, and regulatory clarity expand.

Defence Procurement Is the High-Value Segment Where Domestic Content Requirements Create a Structural Advantage

The Indian Ministry of Defence's Positive Indigenisation Lists, which specify defence equipment categories that cannot be imported and must be sourced from domestic manufacturers, include multiple categories of unmanned aerial systems. The fourth Positive Indigenisation List, released in 2023, added surveillance drones, logistics drones, and certain electronic warfare UAVs to the indigenisation mandate. This procurement policy creates a structural revenue opportunity for Indian drone manufacturers that is not subject to international competition, and the defence budget's multi-year procurement planning horizon provides revenue visibility that commercial market demand cannot match in maturity.

ideaForge has been the primary beneficiary of defence procurement contracts for tactical surveillance UAVs, having supplied platforms to the Indian Army, paramilitary forces, and border security organisations. Its Switch 2.0 UAV , designed for high-altitude operations in Himalayan border environments , achieved operational acceptance and is in active deployment with units along India's northern borders. The Indian Army's requirement for a large fleet of loitering munitions and surveillance drones, which is separate from the tactical UAV procurement that ideaForge serves, is driving the next wave of domestic defence UAV development. Alpha Design Technologies, Kadet Defence, and Newspace Research are all developing loitering munition and swarm UAV capabilities in response to requirements that the Indian government has determined must be met through domestic production.

Regulatory Evolution Has Unlocked Commercial Operations That Were Previously Prohibited

India's Drone Rules 2021, which replaced the Unmanned Aircraft System Rules 2021 within months of publication to substantially liberalise the regulatory framework, created the operational environment for commercial drone deployment at scale. The liberalisation eliminated most requirement for unique identification numbers, import approvals, and operator certificates for drones below 250 grammes, and significantly simplified authorisation for medium and large category drones operating in Green Zones , areas designated as default permitted airspace for drone operations. The Drone Airspace Map published by the DGCA through the DigitalSky platform provides operators with real-time airspace status and digital flight plan submission, reducing the operational friction that had previously deterred commercial drone service providers from scaling their operations.

Beyond-Visual-Line-of-Sight operations, which are necessary for the drone logistics, corridor inspection, and large-area agricultural applications that represent the highest commercial value drone use cases, remain subject to experimental and conditional approvals in India rather than a standard certification pathway. The DGCA's draft BVLOS framework, circulated for industry consultation in 2024, proposes a risk-based authorisation system analogous to the European Union Aviation Safety Agency's UAS Specific category approach. The finalisation and implementation of a BVLOS certification pathway is the regulatory event that will unlock the next growth phase for Indian commercial drone services, and the operators who have built BVLOS operational capability under experimental permissions are positioned to scale rapidly when the standard pathway is available.

Export Ambition Is the Next Chapter for Indian Drone Manufacturers

The PLI scheme's success in building domestic manufacturing capability has created an industry with export ambition. Indian drone manufacturers have identified markets in South and Southeast Asia, sub-Saharan Africa, and the Middle East where the combination of price competitiveness, agricultural application alignment, and the absence of the geopolitical concerns that affect Chinese drone suppliers creates a specific commercial opportunity. The US government's restrictions on DJI and other Chinese drone manufacturers , and the FCC designation of several Chinese drone manufacturers as national security concerns , have created a market opening in price-sensitive international markets that Indian manufacturers are pursuing with government support through defence export promotion frameworks.

Garuda Aerospace's export enquiries from African agricultural markets and ideaForge's defence export interest from Southeast Asian militaries represent early-stage but commercially real international opportunities. The Technology Development Fund, managed by the Defence Research and Development Organisation, is providing grants for drone technology development specifically oriented toward export-capable defence systems. The alignment of PLI-driven manufacturing capability, defence technology development funding, and international market opportunity is creating the conditions for Indian drone manufacturers to transition from domestically-protected infant industry to internationally competitive exporters within the next five years. The scale of the agricultural drone market in India alone , which will continue to grow regardless of export outcomes , provides the revenue foundation and manufacturing volume that makes this transition economically plausible.

Top 10 Companies in the India and Global Drone and UAV Technology Market

1. ideaForge Technology , India's leading tactical surveillance UAV manufacturer with Indian Army and paramilitary contracts and the Switch 2.0 high-altitude platform
2. Garuda Aerospace , Indian PLI-registered drone manufacturer with Kisan agricultural spraying platform and one of the largest PLI production values in the scheme
3. Throttle Aerospace Systems , Indian drone manufacturer targeting logistics, surveillance, and precision agriculture applications under the PLI framework
4. Asteria Aerospace (Tata Group) , Indian drone developer acquired by Tata Advanced Systems; active in surveillance and mapping drones for government and enterprise customers
5. Skydio , US autonomous drone manufacturer benefitting from DJI restriction in the US government and enterprise market with AI-powered obstacle avoidance
6. Autel Robotics , US-based drone manufacturer positioned as the primary DJI alternative for commercial and government markets under Chinese drone restrictions
7. AgEagle Aerial Systems , US agricultural drone and sensor company providing fixed-wing and multirotor platforms for precision agriculture and geospatial data collection
8. Tata Advanced Systems , Indian defence aerospace manufacturer with drone assembly and component supply capabilities under the PLI indigenisation framework
9. NewSpace Research and Technologies , Indian defence drone developer focused on swarm technology, loitering munitions, and fixed-wing surveillance UAVs for Indian military requirements
10. Kadet Defence Systems , Indian UAV company developing loitering munition systems aligned with Indian Army requirements under the positive indigenisation mandate