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India is rolling out a $234 million drone incentive program to ramp up local production of civil and military drones, curb reliance on imports, and counter Pakistan’s expanding drone efforts supported by China and Turkiye, according to a Reuters report citing three sources.
The new India drone incentive program, set to run for three years, will back the manufacturing of drones, components, software, counter-drone systems, and services. This marks a substantial leap from India’s earlier $15 million initiative launched in 2021, which aimed to assist drone start-ups but struggled to drive major investment or research breakthroughs.
Sources revealed that through this India drone incentive program, New Delhi aims to produce at least 40 percent of key drone components domestically by the end of the 2028 fiscal year. The civil aviation ministry is spearheading this drive, with additional support expected from the Small Industries Development Bank of India, which plans to offer low-interest loans for working capital and R&D.
Conflict With Pakistan Highlights India Drone Vulnerabilities
Amid rising regional tensions, the move comes after recent cross-border strikes and missile exchanges between India and Pakistan that were defused only by U.S. intervention. Indian Defence Secretary Rajesh Kumar Singh acknowledged that both nations heavily deployed drones, loitering munitions, and kamikaze drones during the conflict, underscoring the need to deepen India’s self-reliance in drone technology.
India currently bans the import of drones but allows drone parts, many of which still come from China, especially motors, sensors, and imaging systems. The incentive program is designed to encourage manufacturers to source more components domestically.
Reuters also noted that over the next 12 to 24 months, India may invest up to $470 million more in unmanned aerial vehicles through a staggered approach. With more than 600 drone-related companies already operating in India, the program seeks to transform this fragmented sector into a robust ecosystem capable of supporting both civilian and military needs.
