I've 1 year drop in diploma and 2 year drops in engineering. Can I get admission in IIM institute ?

It won't make any difference at all. You need to be graduated before joining any b-school for pursuing MBA degree with more than 50%in 10th 12th and graduation.

Also you need to prepare an appropriate answer why you took drop. Make sure you give a valid reason which properly justify your actions.

Prepare well and aim for high percentile in order to get a call from top reputated colleges like IIMs. Remember one more than every reputated college like IIMs make a merit list based on aggregate score of individuals in order to call students for next interview and WSAT round which is based on parameters like CAT marks, 10th 12th and graduation percentage, work experience, engineer or non engineer, gender with different weightages for different IIMs.

So you need to make sure that you get a high percentile in order to increase the probably of getting a call and convert it.

All the best for your preparations and exams!!

It won't be a matter of concern officially but be ready to answer the question regarding gap in interview

If you graduated, it will not make any effect