Technology
Drone Economy Takes Flight
Posted On: 18 SEP 2025 15:54 PM
GST Reforms for India’s Drone Ecosystem
Key Takeaways
- GST on drones reduced from 18%/28% to a uniform 5%.
- Reform ends classification disputes and ensures policy certainty.
- Boosts domestic drone manufacturing under Make in India.
- Expands drone applications across agriculture, mining, logistics, and defence.
- Expected to create jobs in manufacturing, software, and field operations.
Introduction
Drones have emerged as transformative tools across sectors like agriculture, defense, disaster management, and infrastructure development. Recognizing their potential, the Indian government is intensifying efforts to integrate drone technology into national development strategies. Initiatives such as the 'Namo Drone Didi' scheme aim to empower women-led Self-Help Groups (SHGs) by providing drones for agricultural services, thereby enhancing productivity and creating livelihood opportunities. In the defense sector, the Indian Army's Terrier Cyber Quest 2025 focuses on leveraging emerging technologies, including drones, to address modern security challenges. Furthermore, the government is facilitating the growth of the domestic drone industry by offering affordable certification services through the National Test House, supporting the 'Make in India' initiative. These concerted efforts underscore the government's commitment to harnessing drone technology for economic growth, national security, and social empowerment.
Working along the same lines, in the 56th Meeting of the Goods and Services Tax (GST) on September 3, 2025, the GST on unmanned aircrafts (drones) has been significantly reduced from the earlier 18% / 28% to a uniform 5% rate. This rationalization aims to encourage wider adoption of drones across sectors while also boosting domestic manufacturing under the Make in India and Atmanirbhar Bharat initiatives. A uniform tax structure will end classification disputes, provide policy certainty, and offer a predictable environment for businesses investing in this emerging industry.
Efforts by the Government of India to Promote the Drone Industry
The Government of India has taken several steps to promote the drone industry, aiming to make India a global drone hub by 2030. Key measures include the liberalised Drone Rules, 2021, creation of the DigitalSky platform for online permissions, and the PLI Scheme for drones and components to boost domestic manufacturing. Initiatives like Drone Shakti encourage Drone-as-a-Service startups, while training programmes through DGCA-approved institutes are building skilled manpower. Events such as the Bharat Drone Mahotsav further showcase indigenous innovations and strengthen the ecosystem.
Key Highlights of GST Reduction on Drones
A. Uniform 5% GST Rate
- Applicable on all drones, irrespective of whether they are fitted with cameras or not.
- Ensures parity and eliminates ambiguity in classification.
B. Policy Benefits
- Brings an end to classification-related disputes.
- Provides long-term clarity and stability for the industry.
- Complements the Production Linked Incentive (PLI) Scheme for drone manufacturing and components.
C. Sectoral Benefits
- Agriculture: crop monitoring, pesticide spraying.
- Petroleum & Mining: pipeline inspection, asset monitoring.
- Infrastructure: land surveying, mapping.
- Logistics: last-mile delivery solutions.
- Defence & Security: surveillance and monitoring.
- Emergency Response: disaster relief, rescue operations.
D. Economic and Employment Impact
- Expected to create new jobs in:
- Drone manufacturing and assembling.
- Software development and data analytics.
- Field operations and maintenance.
Conclusion
This reform is a decisive step towards strengthening India’s position in the global drone ecosystem. By ensuring affordability and promoting innovation, it is set to accelerate adoption across industries, generate employment, and contribute to India’s vision of becoming a global hub for advanced technologies.
References
Ministry of Civil Aviation
https://digitalsky.dgca.gov.in/home
https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1779782
https://www.pib.gov.in/PressReleasePage.aspx?PRID=1828683
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2149706
https://www.pib.gov.in/PressReleseDetail.aspx?PRID=2161248
https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1986162
https://static.pib.gov.in/writereaddata/specificdocs/documents/2022/jan/doc202212810701.pdf
Click here to see pdf
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