The government is poised to launch a Production Linked Incentive (PLI) scheme worth ₹15,000 crore, equivalent to approximately $1.6 billion, aimed at bolstering domestic manufacturing of small aircraft.

This initiative, expected to be unveiled soon, seeks to invigorate the country's aerospace sector by incentivising production, innovation, and self-reliance. Officials from the Ministry of Civil Aviation have indicated that the scheme will target small aircraft, including those used for regional connectivity, training, and specialised operations, aligning with India's broader push towards Atmanirbhar Bharat in defence and aviation.

Small aircraft, typically encompassing planes with capacities under 19 seats, play a pivotal role in enhancing regional air connectivity under schemes like UDAN (Ude Desh ka Aam Naagrik).

Currently, India relies heavily on imports for such aircraft from manufacturers like Cessna and Embraer, leading to high costs and dependency on foreign supply chains.

The PLI scheme will offer financial incentives linked to production milestones, sales targets, and value addition through local components, potentially reducing acquisition costs by 20-30% over time.

This move builds on the success of existing PLI frameworks in sectors like electronics and automobiles, where investments have spurred manufacturing hubs and job creation. For small aircraft, the scheme is likely to allocate funds over a five-to-seven-year period, with disbursements tied to incremental production volumes and indigenous content ratios.

Companies qualifying for incentives must commit to establishing greenfield facilities or expanding existing ones, prioritising technologies such as composite materials and electric propulsion systems.

The scheme addresses critical gaps in India's aviation ecosystem. Domestic production of small aircraft remains nascent, with Hindustan Aeronautics Limited (HAL) focusing primarily on larger military platforms and trainers like the HTT-40.

Private players, including the National Aerospace Laboratories (NAL) and start-ups like Garuda Aerospace, have prototyped small civil aircraft, but scaling up has been hampered by funding and certification hurdles. The PLI will provide a structured fiscal boost, encouraging joint ventures with global original equipment manufacturers (OEMs) while mandating technology transfer.

This initiative gains urgency amid global supply chain disruptions and India's strategic pivot towards indigenous capabilities. With neighbours like China advancing in civil-military fusion aviation, New Delhi views small aircraft manufacturing as a dual-use opportunity—supporting civilian regional flights while enabling quick adaptation for surveillance, disaster relief, and light military roles.

The scheme dovetails with the Defence Research and Development Organisation's (DRDO) efforts in UAVs and light aircraft, fostering synergies in avionics and propulsion.

Economically, the PLI is projected to generate over 10,000 direct jobs in manufacturing, engineering, and maintenance, alongside indirect employment in ancillary industries like forgings and electronics. Bangalore, already a hub for HAL and private aerospace firms, stands to benefit significantly, potentially emerging as India's 'Little Boeing' for small aircraft. Export potential also looms large, with incentives for aircraft meeting international standards like those of the European Union Aviation Safety Agency (EASA) or the US Federal Aviation Administration (FAA).

Implementation details are under finalisation, with a high-level committee reviewing applications based on criteria such as minimum investment thresholds (likely ₹500-1,000 crore per project), production ramp-up timelines, and R&D commitments.

Unlike broader PLI schemes, this one may include provisions for testing infrastructure, with funds earmarked for upgrades at facilities like the National Flight Test Centre in Bangalore. Certification processes will be streamlined through partnerships with the Directorate General of Civil Aviation (DGCA).

Challenges persist, including the high capital intensity of aviation manufacturing and the need for skilled talent. India faces a shortage of aerospace engineers proficient in areas like aerodynamics and systems integration, though initiatives like the Skill India Mission could bridge this. Intellectual property concerns may deter some foreign partners, necessitating robust safeguards within the scheme's guidelines.

Successful precedents offer optimism. The PLI for drones has already catalysed over 200 indigenous manufacturers, reducing import reliance from 90% to under 50%. Similarly, HAL's TEJAS program demonstrates India's capacity to scale fighter production, a model adaptable to civil small aircraft. Experts anticipate the scheme could position India as a net exporter by 2030, targeting markets in Southeast Asia and Africa.

Stakeholders, including industry bodies like the Society of Indian Defence Manufacturers (SIDM), have welcomed the announcement. They advocate for inclusive eligibility, extending benefits to micro, small, and medium enterprises (MSMEs) in the supply chain. The government plans consultations with state administrations, particularly in Gujarat and Uttar Pradesh, where new aerospace parks are under development.

India's aviation ambitions, this PLI complements the vision of achieving 300 million annual passengers by 2030. Small aircraft are essential for tier-2 and tier-3 city connectivity, where runways are shorter and operating costs lower. By fostering a domestic ecosystem, the scheme mitigates risks from volatile global fuel prices and geopolitical tensions affecting imports.

Looking ahead, the initiative could spur innovation in sustainable aviation, with incentives for hybrid-electric small aircraft aligning with India's net-zero goals by 2070. Collaborative R&D with institutions like IITs and IISc could accelerate breakthroughs in battery technology and lightweight structures. Ultimately, this ₹15,000 crore infusion signals a transformative step, propelling India from an aviation consumer to a formidable producer on the global stage.

Agencies