Taiwan legislature begins review of four drone procurement bills

Taiwan's legislature has begun reviewing four competing drone procurement bills, as political parties debate how to fund and develop the island's unmanned defense systems.

After the Executive Yuan's draft special act on the procurement of indigenous unmanned defense systems, unveiled June 18, was blocked from committee review by opposition lawmakers from the Kuomintang (KMT) and Taiwan People's Party (TPP), both the ruling and opposition camps introduced their own versions of the legislation.

On July 3, the Legislative Yuan referred four proposals, including the Executive Yuan's draft, the KMT caucus version, the TPP caucus version, and a proposal introduced by Democratic Progressive Party (DPP) Legislator Lin Chu-yin (林楚茵), to joint review by the Economics, Foreign Affairs and National Defense, and Finance committees, formally launching the legislative review process.

Cabinet’s version 

Under the Executive Yuan's proposal, the government would allocate up to NT$210 billion (US$6.7 billion) in special funding from August 2026 through the end of 2031 to procure coastal surveillance drones, coastal strike drones, and small suicide unmanned surface vessels. 

The plan aims to strengthen Taiwan's asymmetric warfare capabilities while establishing a non-red supply chain independent of Chinese suppliers.

The Executive Yuan said the bill seeks to build domestic manufacturing and maintenance capabilities through large-scale procurement, long-term orders, and an iterative acquisition model, thereby enhancing Taiwan's ability to rapidly replenish unmanned systems during wartime and improving overall defense resilience.

KMT proposes a larger budget

The KMT caucus has proposed a Defense Indigenous Unmanned Systems Technology Development and Procurement Act, which would replace the Executive Yuan's special budget with regular annual government appropriations.

The KMT proposal would allocate NT$240 billion over six years, equivalent to NT$40 billion annually, to be jointly administered by the Ministry of National Defense (MND) and the Ministry of Economic Affairs (MOEA).

In addition to procurement, the proposal places greater emphasis on institutionalizing long-term industrial development. 

It requires the government to formulate a medium- and long-term development strategy for unmanned systems, with the MND conducting biennial reviews, while both the defense and economic ministries would submit annual implementation reports to the Legislative Yuan.

The KMT draft also establishes clear localization targets, requiring domestically produced components to account for 50% of military-grade commercial drones within two years of the law taking effect, rising to 80% for military-use commercial drones within four years. 

It further calls for a supply chain security certification system and the exclusion of high-risk suppliers to strengthen domestic production capacity and supply chain resilience.

TPP sets no spending cap

The TPP caucus's proposal designates the MOEA as the lead agency, with the MND responsible for defense-related applications. 

Unlike other proposals, it does not set an upper spending limit, with funding to be allocated through the regular annual budget process.

The bill would establish a National Drone Industry Development and Strategy Committee under the Executive Yuan to coordinate, promote, and oversee national drone industry policy. 

The committee would be required to convene at least once every six months to review industry development strategies and major policy initiatives, while extraordinary meetings could be called when necessary. 

Meeting records would be made public to enhance interagency coordination and policy transparency.

The TPP proposal also advocates establishing a trusted supply chain certification system, developing drone testing sites and flight corridors, promoting regulations for beyond-visual-line-of-sight (BVLOS) operations and Advanced Air Mobility (AAM), and creating export promotion and joint procurement mechanisms. 

The proposal envisions the government serving primarily as an institutional architect rather than relying solely on subsidies and procurement to drive industry development.

Lin’s version 

The proposal introduced by DPP Legislator Lin Chu-yin largely mirrors the Executive Yuan's approach, focusing on strengthening Taiwan's coastal denial capabilities, asymmetric warfare capacity, and rapid wartime replenishment capabilities.

It also retains the same NT$210 billion special budget as the Executive Yuan's proposal, emphasizing that stable procurement demand would help expand domestic manufacturing and maintenance capabilities while establishing a secure non-red supply chain.