Article

India's Union Budget 2026 is expected to launch a ₹10,000 crore multi-year incentive scheme aimed at bolstering domestic drone manufacturing under the 'Drone Shakti' initiative. This initiative will feature a two-tier subsidy system providing 10-15% on capital expenditures and a similar percentage linked to manufacturing output, aiming to enhance cost-competitiveness for locally made drones.

The program mandates 50-60% domestic content to reduce reliance on imports. Three companies poised to benefit are Zen Technologies, Paras Defence and Space Technologies, and IdeaForge Technology. Zen Technologies is shifting towards anti-drone systems, while Paras Defence is developing hydrogen-powered and anti-drone technologies.

IdeaForge is focusing on dual-use drone applications, despite facing recent revenue declines. The budget support is anticipated to significantly increase the market for these companies and boost domestic production capabilities.