The coming of age of the Indian drone industry was heralded by the spectacular drone show undertaken by more than 1,000 drones on 29th January 2022, during the prestigious beating retreat event. The ability of the drones to create awe-inspiring images such as the “Make in India” lion has clearly demonstrated the inherent strengths of the Indian drone industry and was symbolic of the government’s endeavour to make India a “global drone hub” by 2030.

The use of drones in India has seen a phased rise over the past few years. Considering the various commercial and non-commercial uses of drones in agriculture, aerial cinematography, mining activities, mapping of national highways and disaster management, the Indian government aims to accelerate the growth of the drone industry. With the vision of making India a drone hub by 2030, the government has strategically put in place several reforms including Production Linked Incentives for the drone industry, regulatory streamlining and the recently introduced import ban on drones.

Following the drone rules announced in August 2021, several experts have been optimistic about the fact that over the next five years the Indian drone market has the potential to grow to INR 500 Bn. Further, according to estimates by the Civil Aviation Ministry, the Indian drone industry can achieve a turnover of INR 120-150 Bn by the year 2026. Over the span of the next three years, the government has targeted to attain an investment of INR 5,000 crore in the drone manufacturing industry in addition to creating over 10,000 job opportunities.

A recent move by the government in this regard is the ban on the import of drones. The Directorate General of Foreign Trade (DGFT) issued an order on 9th February to prohibit the import of drones in Completely-Built-Up (CBU), Semi-Knocked-down (SKD) and Completely-Knocked-down (CKD) forms with immediate effect. The only exceptions of drones that will be authorised to be imported would include those imported by government entities, educational institutions recognised by the federal or state governments, government-recognized R&D firms, and drone manufacturers for research and development as well as defence and security objectives. While the import of finished drones has been banned, the import of drone components has been made free. This essentially means that domestic or local manufacturers would not need an approval from the DGFT to import parts like chips, ion batteries etc.

This landmark step has come days after the Union Budget 2022-23, which highlighted “Drone Shakti” and “Drone-As-A-Service” as major commitments of the government’s efforts towards “Make in India” and “Atmanirbhar Bharat”. Further, with the government’s increased emphasis on the use of “Kisan Drones” for crop inspection, digitisation of land records, spraying of insecticides, etc. the demand for drones will witness a sharp increase. Currently, India imports drones mainly from the US and Israel to meet its defence needs. While drones for defence proposes can still be imported, with this new initiative, ‘Atamanirbharta’ in defence will gain a few found momentum. The Indian Army has already been working in collaboration with the Society of Indian Defence Manufacturers for over two years to reach out to startups in the field of emerging technologies like Drones, Counter Drones, Robotics, Artificial Intelligence and 3D printing.

While many in the drone industry have welcomed the government’s new initiative some are still sceptical as to how Atmanibharta can effectively be achieved if local manufacturers still continue to rely on foreign-made components. This concern could be addressed in a phased manner. According to Smit Shah, President Drone Federation of India, while many drone manufacturers in India undertake less of manufacturing and depend more on assembling imported components in India, the import ban will allow Indian manufacturers to first have complete control over design, IP and software and then over a period of time will enable them to undertake further indigenisation.

At a time when innovations in the drone industry are growing by leaps and bounds and investments in the drone industry are increasing by manifold, indigenising in drone production would be an important step in making sure that India is well equipped to deal with a surge in demand, as well as, the global competition that may come up in the field in the future. To cite a few examples, the new drone laws have led to increased traction in the market wherein numerous companies have been quick to leverage their technological know-how to capitalise on this new drone wave in India. Amazon has recently approved order delivery through drones. Swiggy, a food delivery platform in India has also received a go-ahead from the Directorate General of Civil Aviation and the Ministry of Civil Aviation in June last year to begin trials for drone food deliveries using “Beyond Visual Line of Sight” drones. Bangalore based Skylark Drones also received a fund investment of INR 220 Mn by Info Edge Ventures in June 2021. This rapid pace of investments and technological innovations in the sector will result in consumers getting access to cutting edge products and services at affordable prices.

Another major step taken by the government towards realising this vision was the PLI scheme for drones and drone components that was launched in August last year. The scheme envisages INR 120 crore for drone manufacturing over a period of three years. The scheme is likely to double the domestic drone manufacturing combined sales turnover by the financial year 2021-22.

Our government in the recent years has given a massive push to our domestic drone industry. In doing so the government is hoping to develop not only drone manufacturing, but also the burgeoning drone services sector. Over the next few years, a surge in demand for drones is on the cards as various sectors like agriculture, defence, retail and e-commerce will increase their demand for drones and businesses and start-ups are expected to increase their investments in this field. It is hoped that in the coming years, in addition to enabling a flourishing manufacturing sector, India will also become a one-stop destination for any foreign investors investing in the drone sector.

This has been authored by Ishita Sirsikar. 

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