GST on Drones Slashed to 5% to Boost ‘Make in India’ Drive

The Indian government has significantly revised the GST on drones to a uniform 5%, down from earlier rates of 18% and 28%. This move is designed to promote indigenous defence manufacturing and support the ‘Make in India’ initiative.

Uniform 5% GST on All Drone Types

New rules announced on September 3, 2025, all drones, irrespective of their functionality or purpose, will attract a standard 5% GST. Previously, drones with integrated cameras were taxed at 18%, while personal-use drones faced a steep 28%. This rationalisation dramatically lowers acquisition costs and is expected to stimulate wider adoption, especially within India’s defence and security forces.

Lower Tax Burden on Defence Equipment

This tax overhaul will reduce costs for critical military-grade equipment including remote piloted aircrafts, ship-launched missiles, and high-end aviation gear. The exemption of IGST on vital imports such as critical components and spares gives budgetary relief for defence procurement. It will streamline project costs without compromising on capability development.

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Boost to Drone Training Infrastructure

The inclusion of simulators  flight and motion under the GST exemption will bolster aviation training schools and drone academies across India. This affordability gain in training infrastructure is expected to positively impact the creation of a skilled workforce and expand professional opportunities in the drone ecosystem.

Drive Towards Indigenous Manufacturing

With reduced GST and import exemptions, domestic companies gain a cost advantage in research, production, and assembly. The reduced reliance on foreign manufacturers creates an environment where Indian firms can innovate locally and export globally, aligning with India's strategic manufacturing goals under ‘Atmanirbhar Bharat’.

Conclusion

The implementation of a uniform 5% GST on drones and associated equipment not only simplifies taxation but contributes significantly to India's defence capabilities. It supports indigenous growth, decreases dependence on imports, and promotes a self-reliant, technologically advanced defence manufacturing sector.

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