Taiwan passes legislation for drone industry development, defense ministry to oversee military procurement

Taiwan's Legislative Yuan has passed a landmark act aimed at bolstering its defense capabilities and fostering its domestic drone industry. The "Strengthening National Defense Autonomy and Drone Industry Development Act" mandates the central government to allocate a substantial 240 billion New Taiwan dollars over six years, with an annual budget of 40 billion NT dollars as a baseline.

The legislation clearly delineates responsibilities, designating the Ministry of Economic Affairs as the primary governing body for industry development. Crucially, the Ministry of National Defense will take charge of all matters related to the procurement of military-grade drones. This dual approach seeks to simultaneously advance technological innovation and ensure national security.

A key focus of the act is the development of a trusted supply chain. The Ministry of National Defense is required to prioritize the procurement and integration of domestically manufactured, low-cost, high-performance drones. Specific attention will be given to acquiring attack and surveillance drones suitable for amphibious landing operations. Furthermore, the ministry must maintain a monthly updated list of approved suppliers and critical components, explicitly prohibiting Chinese manufacturers and personnel from participating in procurement.

The act also addresses safety and oversight. It emphasizes a distributed resilience principle for drone defense systems, avoiding concentrated deployment or production. Public sector use of drones must adhere to wartime conversion capabilities. Any entity seeking government incentives or participating in public procurement who uses uncertified, unverified, or high-risk components or software faces penalties, including disqualification and fines.

Oversight mechanisms are integrated into the legislation. Procurement contracts exceeding 100 million NT dollars require a report to the Legislative Yuan within 30 days of the award. The Ministry of Economic Affairs, in conjunction with the Ministry of National Defense, must submit an annual report to the Executive Yuan and the Legislative Yuan detailing the progress of drone technology development, localization rates, supply chain certifications, and procurement execution. The act is set to take effect six months after its promulgation.