The Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry, has simplified and liberalised the policy for export of Drones/UAVs meant for civilian end uses from India. This decision has been taken in line with the emphasis laid in India’s Foreign Trade Policy 2023 on facilitating the export of high tech items which includes the promotion of exports of Drones/Unmanned Aerial Vehicles (UAVs) manufactured in India for civilian end uses and taking into consideration India’s international obligations on non-proliferation.
All kind/type of drones/UAVs were earlier controlled/restricted for export under the category 5B of the SCOMET (Special Chemicals Organisms Material Equipments and Technology) list under Appendix 3 of Schedule 2 of the ITCHS classification of Import and Export Items. This list deals with the category of items that are subject to specific regulations due to their potential dual-use nature—meaning they can have both civilian and military applications. SCOMET license was required for export of such items and the industry was facing challenges to export drones with limited capability which are only meant for civilian use.
Based on the wider consultations held with all the stakeholders including seeking public/industry comments on the policy, the SCOMET policy of drones/UAVs meant for civilian use has been amended vide DGFT Notification No. 14 dated 23.06.2023 to simplify and liberalise the policy for export of drones/UAVs. The export of Drones/UAVs not covered under the specified categories in SCOMET list and capable of range equal to or less than 25 km and delivering a payload of not more than 25 kg (excluding the software and technology of these items) and meant for only civilian end-use, will now be subject to General Authorization for Export of Drones (GAED), a onetime general license valid for 3 years.
This policy change will not require the Drone Manufacturers/Exporters with GAED Authorization to apply for SCOMET license for every similar export shipment meant for civilian purpose, within the validity period of 3 years subject to post reporting and other documentary requirements, reducing the compliance by the industry to apply for SCOMET license every time they have to export any kind of civilian drone/UAVs.
This would further facilitate the Drone/UAV manufactures/industry to export drones with ease, thereby, facilitating ease of doing business and promoting export from India. This policy change would also promote India as a global manufacturing hub of drones/UAVs and push the start-ups/new drone manufacturers in this field to scale up and look at the global markets.
It will allow Indian drone manufacturers to access larger markets and compete on a global scale, ultimately boosting economic activity. Liberalising export controls on drones may also encourage innovation and technological advancement in the drone/UAV industry.
The detailed procedure of General Authorization for Export of Drones (GAED) for export of drones/UAVs meant for civilian use has also been notified vide DGFT Public Notice No.19 dated 23.06.2023 and is available on DGFT website.
PLI scheme
The government had about two years back notified the Production Linked Incentive (PLI) scheme for drones and drone components, under which the Ministry of Civil Aviation has disbursed about Rs 30 crore to the beneficiaries during 2022-23.
The total incentive is Rs 120 crore spread over three financial years. It is nearly double the combined turnover of all domestic drone manufacturers in 2020-21.
For this scheme, the PLI rate is 20% of the value addition which is one of the highest among PLI schemes.
Under this scheme, the value addition is calculated as the annual sales revenue from drones and drone components (net of GST) minus the purchase cost (net of GST) of drone and drone components, as per an official communique.