Drones have been side projects for a long time in India. They have been assessed, included in trials but, were largely ignored. Not exactly essential, but certainly useful. That phase is over
Drones are now subtly infiltrating India's ambitious plans and daily activities. They are staking India's claim in certain areas of the most disputed waters in the world, monitoring the borders, assisting with disaster relief, inspecting bridges and power lines, and delivering supplies to remote villages. Using innovative technology is no longer the only thing at stake. It is about strength, reach, and an invincible feeling.
There are other factors besides speed that make India's drone push unique. It is how everything comes together: government policy, economic demand, military thinking, and geopolitics are all moving in the same direction. This kind of synchronicity is extremely rare and transforms everything.[1,2]
When Security Becomes Continuous, Drones Become Essential
India's perspective on security has evolved significantly. The situation along the Line of Actual Control has escalated, along with the ongoing need for surveillance of the western border. Given this, there is no room for episodic intelligence collection and response; India now has greater strategic responsibilities concerning both chokepoints throughout the Indian Ocean[3,4] and overall maritime domain security.
At this point, drones have become an intrinsic operational requirement. High-altitude surveillance, loitering munitions, persistent ISR, unmanned logistics in hostile environments, and generally defined maritime domain awareness are now recognized as fundamental operational capabilities instead of specialized ones. Pretagging these capabilities can only be conducted using unmanned platforms, which are significantly cheaper, more rugged, and more redundant than traditional platforms.
The market's reaction reflects this growth. The market for unmanned aerial vehicles (UAVs) in the Indian defence space is projected to experience an annual growth rate of greater than 20 %, growing to approximately USD 420 million in 2021 and projected to grow to USD 4 billion by 2036. This growth trend is not affected by cyclical procurement (i.e., budget spikes) or timeline for funding. Rather, it is governed by established doctrine by India's current definition of how it will surveil, defend, and respond.[5,6]
The Quiet Advantage: Where Defence Meets Civil Scale
There is a growing difference between the experience that is happening in India versus the rest of the world. The global drone market has totally separated the civilian sector from the military one; each has a separate set of vendors, standards, and business models. However, the opposite is true for India where the demand for military-grade drones has increased at an astronomical rate while the demand for civilian drones has also continued to grow rapidly, thus making both sectors merge.
Interestingly, estimates say that 60-70% of all components used in manufacturing drones (e.g., airframes, engines, avionics/sensors, composite materials, and ground systems) are identical between military and civilian drone models. This creates an incredibly strong feedback mechanism whereby products created in the military sector will produce a large and reliable proof base with which to aid in the development of civilian drones (i.e., creating greater scalability, future-proofing software-related issues, and reducing costs). It is exceedingly rare for there to be such a massive dual-use market that can achieve such prominent levels of scalability.[7]
India and the Global Drone Reset
Internationally, the drone industry itself is undergoing a transformation. Defence may have spurred the industry, but it is commercial use that is fuelling its growth. Ranging from agriculture to logistics, mining, infrastructure inspection, and business services.
The international UAV market is projected to expand from around USD 10 billion in 2021 to almost USD 23 billion by 2031, with commercial drones contributing nearly half of the total.[6]
India is undergoing the same shift, but with a steeper slope. The commercial UAV market is set to register 18-20 % CAGR, growing from USD 84 million in 2021 to around USD 530 million by 2031. Consumer drones alone currently offer a USD 500-700 million business opportunity. Together with defence, India is quickly turning out to be one of the most exciting drone markets in the world, across all segments that matter. Not tracking the global trend. Leading the charge.[5,6]
Policy That De-Risks Capital
Capital momentum cannot last without policies in place to assist its accumulative effect. In the case of the successful drone industry in India, the role played by public policy has changed from being an impediment to being an enabler. The 2021 Drone Rules have alleviated over 90% of the previous compliance burden by providing a system of trust and digital-based approvals. GST rates have become uniform 5%, and therefore no ambiguities or friction are created or cause discontent. The DigitalSky platform provides a singular digital infrastructure for all registration, certification, and flight approval purposes.[1,2]
Manufacturing economics have also experienced a fundamental change since implementing the Production-Linked Incentive program, which offers incentives of up to 20% based on the value added to products manufactured in India, leading to an increase of 7X in total revenue for companies that participate in the program.[1]
The next phase will continue to grow at an exponential rate with a proposed Drone Technology Incentive program of approximately USD 240 million, targeting a 40% localisation level by FY28, including components, anti-drone systems, software, and services. This phase will no longer be about innovating the industry but developing its depth.[4]
Where the Real Money Resides: The Gap Thesis
Here is an interesting paradox about India's rapid increase in drone use. Demand for drones is exploding across the areas of military, agriculture, infrastructure, logistics, healthcare, and public services. However, India continues to rely on imports for many high-value components needed to make drones (e.g.: sensors, propulsion systems, avionics, specialized payloads). The formation of Integrated R&D clusters will take time to happen; therefore, long-term value will be created from this Rental demand versus Supply gap.[5,7]
By 2030, it is estimated that India's total market for manufacturing Drones including exports, should be somewhere between USD 20 and 23 billion. In addition to the assembly line, the best possible long-term returns will come from the localization of components, software autonomy, platform integration, defence-grade payloads, and Drone-as-a-Service models that create ongoing revenue streams.[5]
From Startup Buzz to Industrial Scale
We are seeing rapid development of the ecosystem beyond UAVs with over 350 start-ups developing products across the full range of the supply chain including manufacturing, components, software and services; more than 52 platforms receiving type certification; over 22,500 registered drones (the number doubled in one year); and more than 23,000 remote pilots trained by over 95 different remote pilot training organisations. The expected total number of UAV jobs in drone manufacturing will exceed 120,000 by 2025; the number of UAV jobs in service sectors will exceed 600,000 – not gig jobs but solid industrial employment. This is now becoming an industry, not a start-up story.
Exports, Autonomy, and The Strategic Endgame
With localisation intensifying, India is emerging as an export-focused drone manufacturing destination, especially for friendly international customers. VTOL drones, FPV drones, thermal cameras, and defence-grade UAVs are finding favour.
For international companies, India represents a diversification strategy to move away from the current supply chain concentration. For India, the aim is much bigger: to achieve strategic autonomy in a space that is increasingly defining modern warfare and homeland security.[3,4]
The TAKEAWAY
The inflection point for the Indian drone industry has been reached.
- Geopolitics ensures demand.
- Commercial adoption ensures scale.
- Policy ensures continuity.
Together, they are transforming India from a drone importer to a drone manufacturer—right from design and manufacturing to software, operations, and exports. For investors and defence-manufacturing companies, this is no longer a question of getting into a market first. This is about getting into an ecosystem that will define the unmanned aviation supply chain in Asia for the next decade. Not just adopting drones but industrializing them. And the runway is long.
This blog is written by This blog is written by Shivangi Sharma
References
[1] Ministry of Civil Aviation (MoCA), Government of India – Drone Rules 2021
[2] DGCA DigitalSky Drone Management Platform
[3] Ministry of Defence – Defence Acquisition Council & policy documents
[4] NITI Aayog – Technology & Innovation publications
[5] BIS Research – Unmanned Aerial Vehicles Market Reports
[6] MarketsandMarkets – Global UAV Market Forecast
[7] Drone Manufacturers Association of India (DMAI)
[8] DPIIT / Startup India – Aerospace & Defence startup ecosystem data
[9] SIPRI – Global defence expenditure & UAV-related datasets
[10] Jane's Defence (subscription)
