West Asia crisis: Drone industry lauds govt's no-penalty relief for disrupted contracts

The drone industry has welcomed the government's decision to grant deadline extensions and waive penalties for contracts with government entities disrupted due to the ongoing West Asia situation, calling it a timely relief for companies affected by supply chain disruptions.

Smit Shah, President of Drone Federation India (DFI), said the government's move to treat the situation as Force Majeure was a "right" step, as many drone companies executing government contracts have faced delays due to the conflict.

"The Government has done the right thing by recognising the situation in the West Asia war as a Force Majeure, meaning an emergency beyond anyone's control," Shah said in a post on social media platform X.


"A Force Majeure (FM) means extraordinary events or circumstances beyond human control... such as a war...," according to the finance ministry circular.

Highlighting the impact on the sector, Shah said, "Many Indian drone companies have government contracts, and because of the ongoing conflict in West Asia, their supplies and deliveries have been badly affected. They were worried about heavy penalties for delays that were not even their fault."

Referring to the Finance Ministry's circular, Shah noted that the relief provides clarity and support to affected firms. "This circular... clearly states that if your contract was disrupted because of the West Asia situation, you will receive an additional 2 to 4 months of time, and no fine will be imposed on you. Fair and practical," he said.

Welcoming the decision, he added that the move sends a strong signal of government support to the industry. "We at the Drone Federation India welcome this decision. It gives relief to our member companies and sends a strong message that the Government stands with the Indian industry during difficult times," Shah said.

He further said that such policy support will help the sector scale up. "This kind of support is what will help India's drone sector grow stronger and deliver on the promise of Atmanirbhar Bharat," he added.

The Ministry of Finance had earlier announced that contracts with government agencies affected by disruptions arising from the West Asia situation may be considered under Force Majeure, allowing deadline extensions of two to four months without penalties.