India’s New Drone Policy to Boost R&D and Manufacturing, May Skip Incentives for Testing

The Indian government is working on a new policy to boost the drone industry by offering financial incentives for research & development (R&D) and manufacturing, but likely skipping incentives for drone testing, according to sources.

Originally, the plan was to provide support for testing, R&D, and manufacturing, but now the focus is shifting towards reducing dependence on certain countries (mainly China) for drone parts. “We will likely give incentives for R&D and manufacturing, but not for testing,” an aviation ministry official said.

The new incentive plan is expected to allocate around ₹3,000 crore and will focus on the civil drone industry, not military drones. Testing will continue at centers like the National Test House (NTH) in various cities, but no financial support will be provided for it.

The previous drone policy announced in 2021 had a smaller budget of ₹165 crore, but with the growing domestic drone industry, stakeholders agree that the larger financial support of ₹3,000 crore is necessary to keep up with the industry’s progress.

The government sees drones playing a key role not just in defense but also in civilian sectors. India aims to become a global leader in drone manufacturing, a space currently dominated by China. By 2030, India’s drone market could be worth $35 billion, with significant contributions from defense and commercial deals, as well as exports.