Taiwan's Legislative Yuan on 27 August 2026 passed the Act on Strengthening Defense Autonomy and Developing the Unmanned Vehicles Industry by 60 votes to 50.
The law sets a six-year ceiling of NT$240 billion (about US$7.56 billion) for drone industry development and military drone procurement.
Funding flows as annual allocations of up to NT$40 billion from the general budget, keeping it under yearly legislative review instead of a single upfront disbursement.
In the same session the legislature rejected a competing NT$210 billion special budget sought by President Lai Ching-te's government.
The Ministry of Economic Affairs will steer industry development and the Ministry of National Defense will handle military procurement, with a drone strategy committee chaired by the vice premier.
Taiwan sets a record defence allocation of 3.32% of GDP, NT$949.5 billion including veterans' affairs and the coast guard.
The legislature approves a special defence budget of NT$780 billion, less than the government had sought but well above the opposition's opening figure.
The Legislative Yuan passes the drone and defence autonomy act, 60-50, and rejects the government's NT$210 billion drone special budget.
President Lai Ching-te's declared goal of raising defence spending to 5% of GDP.
Taiwan's unicameral legislature; passed the act and retains annual review over each year's allocation
Oversees overall unmanned vehicle industry development, including testing sites and indigenous production requirements
Handles military drone procurement under the act
Dedicated committee mandated by the act to coordinate the programme
India liberalised its own drone regime through the Drone Rules, 2021 and notified a production-linked incentive scheme for drones and drone components, pursuing the same goal of domestic manufacture rather than import dependence.
Taiwan's presidency is held by the DPP while the KMT-TPP bloc controls the legislature, so budget bills become the main arena of contest — a recurring theme in comparative politics questions on separation of powers.
Excluding high-risk components mirrors wider moves by democracies to screen telecom, semiconductor and drone supply chains for dependence on a single adversary state.
The shift towards large numbers of low-cost unmanned systems, rather than a few expensive platforms, is the central defence-procurement debate of the decade.
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Taiwan's unicameral 113-seat parliament, distinct from the Executive, Judicial, Examination and Control Yuans.
A one-off appropriation outside the annual general budget, usually released upfront; the legislature here rejected this route in favour of yearly allocations.
Building weapons domestically so that procurement is not hostage to foreign suppliers — Taiwan's stated aim under this act.
Platforms cheap enough to be expended in large numbers, the core logic of modern drone warfare.