Following a recent military conflict with Pakistan, India plans to significantly boost its domestic drone manufacturing capabilities with a new incentive program totalling $234 million (20 billion Indian rupees), according to three sources who spoke to Reuters. The three-year initiative aims to reduce India’s reliance on imported drone components and counter Pakistan’s burgeoning drone program, which reportedly receives support from China and Turkey.

According to the Reuters story, the program will fund the production of drones, components, software, counter-drone systems, and related services. This represents a substantial increase compared to a previous, smaller incentive scheme launched in 2021. While India’s civil aviation ministry is leading the effort, neither it nor the defense ministry responded to Reuters’ requests for comment.

The conflict, triggered by the Pahalgam attack, which India blamed on Pakistan, involved a series of air strikes and missile exchanges between the two nuclear-armed nations. The escalation, ultimately halted through American intervention, highlighted the increasing importance of drones in modern warfare, prompting India’s renewed focus on domestic production.

India’s Defence Secretary, Rajesh Kumar Singh, recently emphasized the need to accelerate the development of a robust domestic drone manufacturing ecosystem, citing the extensive use of drones and loitering munitions during the conflict. While India has previously imported military drones primarily from Israel, the new program aims to increase the proportion of domestically produced key components to at least 40 percent by the end of fiscal year 2028. The initiative will include incentives for manufacturers sourcing parts within India, and the Small Industries Development Bank of India will provide financial support through low-interest loans. The country has banned drone imports but continues to allow the import of components.