Frank Williams, Ho Chi Minh City
Taiwan’s Cabinet has approved a draft bill to fund a major expansion of its domestic drone industry, but political divisions in the legislature threaten to delay or derail the initiative.
The Executive Yuan last Thursday signed off on a proposal authorizing a special budget of up to NT$210 billion (about US$6.6 billion) over five years. The funding would support the development and procurement of locally produced uncrewed vehicles (UVs), including aerial drones and surface vessels. However, Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun said the bill is unlikely to pass before Chinese President Xi Jinping’s anticipated visit to the United States in September.
Uncrewed systems have become central to modern asymmetric warfare, allowing smaller nations to counter more powerful militaries with relatively low-cost technology. Ukraine’s rapid expansion of its drone sector—reportedly producing millions of units annually—has played a decisive role in slowing Russia’s invasion and even enabling strikes deep inside Russian territory. Analysts say Ukraine is now regaining ground for the first time since 2023.
By contrast, Taiwan’s drone ambitions have been hindered by domestic political disputes. Opposition parties, including the KMT and the Taiwan People’s Party (TPP), previously removed all drone-related funding from a NT$1.25 trillion special defense budget proposed by the Cabinet. The cuts have raised concerns about gaps in Taiwan’s defense preparedness and missed opportunities to grow a strategic domestic industry.
Several senior KMT figures—including Taichung Mayor Lu Shiow-yen, Legislative Speaker Han Kuo-yu and Deputy Speaker Johnny Chiang—have voiced support for developing Taiwan’s drone sector. Yet the party has not introduced its own funding proposal, nor have its leaders publicly challenged the earlier budget cuts. Critics argue that decisions within the KMT are being shaped by figures seen as more accommodating toward Beijing, including Cheng and caucus whip Fu Kun-chi.
To address the funding shortfall, the Ministry of National Defense has proposed the “Special Act for the Procurement of Indigenous Uncrewed Vehicles.” The plan outlines purchases of 1,446 coastal surveillance drones, more than 208,000 attack drones, and 1,320 uncrewed surface vessels. Officials say large military orders would provide essential early support to domestic manufacturers, enabling them to scale production and invest in innovation.
Taiwan faces added urgency due to China’s dominance in the global drone market, where it controls more than 70 percent of supply. Strengthening local production is seen as key not only to defense autonomy but also to economic growth.
Recent global trends may work in Taiwan’s favor. The United States and European countries are increasingly moving away from Chinese-made drones, creating new demand for alternative suppliers. Taiwan’s drone industry has already expanded rapidly, with output value reportedly increasing 2.5 times last year. Exports in the first quarter alone exceeded 181,000 units, surpassing the total for all of the previous year.
Analysts say Taiwan has a narrow window to establish itself as a major player. Su Tzu-yun of the Institute for National Defense and Security Research described the sector as a potential “strategic pillar,” comparable to Taiwan’s semiconductor industry.
Still, the bill’s future remains uncertain. The KMT and TPP have indicated they may introduce alternative proposals or fold drone funding into the regular annual budget instead. Legislative delays have already drawn criticism, with the central government budget stalled for more than 300 days, complicating defense planning and governance.
The fate of the drone budget is now shaping up as a key test of the opposition alliance’s stated commitment to national defense.
