Taiwan Minister Warns of Severe Impact as Ruling Party Proposes Drone Budget Cuts

Taiwan's ruling party has proposed significant cuts to the budget for a "comprehensive plan for the development of the unmanned vehicle industry," sparking strong concerns from the Ministry of Economic Affairs. The proposal, put forth by the Kuomintang (KMT) legislative caucus, seeks to halt the "unmanned vehicle industry development comprehensive plan" and eliminate its entire budget for 2026.

Economic Affairs Minister Kung Ming-hsin responded sharply to the proposed cuts. He stated that previous defense budget reductions had already been a blow, likening it to "cutting off one arm." He expressed that the current proposal to slash the economic ministry's plan feels like "cutting off the other arm," leaving domestic businesses to fend for themselves.

Kung emphasized the substantial impact of these proposed cuts on the drone industry. He noted that businesses were already frustrated by the previous removal of drone funding from the defense budget. The elimination of the economic ministry's production and sales plan, he warned, would leave companies without government policy or budgetary support, a situation he described as "very regrettable."

The minister also directly addressed the KMT's claim that the plan was formulated "first by allocating a budget, then finding the demand." Kung vehemently denied this, stating the plan has been in execution for some time. The Ministry of Economic Affairs explained that 2026 is a critical year for the plan's full implementation, with approximately NT$8 billion allocated.

This funding is intended to foster domestic market demand through government procurement of drones, help companies build product track records for overseas expansion, support key technology research and development, provide R&D and production facilities, and refine regulations for flight testing, cybersecurity certification, and government procurement. The ministry stressed that the unmanned vehicle sector is one of Taiwan's fastest-growing industries.

Cutting government support, the ministry warned, would harm Taiwan's overall drone industry and its defense autonomy. If even the budget for procuring public-use drones is eliminated, it would not only weaken Taiwan's competitive advantage in building reliable supply chains and participating in global supply chain restructuring but also hinder the development of over 267 domestic supply chain companies and dozens of listed corporations.