Budget Expectations from Marut Drones

by Prem Kumar Vislawath and Co-founder, Marut Drones

“The drone manufacturing potential in India could be worth US$ 4.2 Billion by 2025, growing to US$ 23 billion by 2030, contributing to the country’s target of a US$ 5 trillion economy. The Government’s ‘Aatmanirbhar Bharat’ (Make-in-India) drive is going all out to support domestic enterprises by fine-tuning policies and regulations so that more and more products are manufactured within the country.
 
The Drone Shakti initiative, rolled out during Budget 2022, aimed to promote and facilitate drones as a service through start-ups. Over the past year, the Indian drone manufacturing industry has flourished due to various policy reforms and schemes like the INR 120 crore PLI scheme for drones and drone components. In Budget 2022, the government made a Rs 120 crore provision for PLIs to the drone industry. Pointing to major growth in the industry observed that the budget falls short of the need of the industry and urged that it be increased to Rs 500 crore.
 
This year, we expect dedicated incentives for drone service startups. Restructuring the PLI scheme is the need of the hour. The 2023 union budget must introduce MSME-focussed incentives as they constitute around 90% of companies in this sector. Benefits to the drone services sector are necessary for the success of Drone-As-A-Service (DrAAS) under Drone Shakti. We need a technically proficient workforce to fulfill the demand of drone services. Benefits towards indigenization and native R&D is of paramount importance to reduce our dependency on foreign OEMs. An additional 10% PLI benefit for companies with more than 50% indigenous Intellectual Property will encourage the innovative companies to innovate more and OEMs to indigenize further to reduce the dependency on imports. It will help propel Make-in-India and put the Indian drone industry on a self-sustaining trajectory.
 
In the Agri space, for instance, given the fact that land holdings are largely in small parcels, every farmer must own a drone and hire a pilot for activities such as crop health monitoring and yield estimation. Such farmers would, however, be open to the idea of ‘drones as a service’, in which you get what you pay for, without the added sunk cost of drone/ drone pilot at your disposal.
 
Instances, where drones as a service would not be the preferred model, would be those where the agency would have frequent and repeated use of drones. The insurance industry is an example of a financial and business case for acquiring drones permanently.
 
There is also a need for focused spending of at least Rs 100 crores on indigenous drone component manufacturing, along with the creation of 50 state-of-art drone skilling institutes producing quality manpower
 
The government already provides a 100 percent tax rebate on profit and gains for 3 consecutive years within the first 10 years of incorporation of a start-up. GST should be reduced to 5 percent and made 0 percent for sectors like agriculture and healthcare that have a high social downstream impact.”