The new liberalised drone rules announced by the government in 2021 gave wings to the budding drone industry. A glimpse of this could be seen at the two-day drone festival, Bharat Drone Mahotsav-2022, organised in New Delhi with over 150 companies — from hardware to software to component OEMs showcasing their solutions.
In his inaugural remarks, PM Modi highlighted the importance of drone technology in the fields of defence, disaster management, agriculture, tourism, film and entertainment.
He cited PM Swamitva Yojana as an example of how drone technology is becoming the basis of a major revolution. Under this scheme, for the first time, every property in the villages of the country is being digitally mapped, and digital property cards are being given to the people.
The ongoing Russia-Ukraine war has brought out one aspect of modern warfare—the use of drones for both surveillance and punitive action. While India has always been dependent on countries like Israel for its drones, the new initiatives of the Modi Government are now resulting in the development of an industry which will increase self-reliance, military strength will gain strategic depth and will earn a significant role in the global supply chain of UAVs and save foreign exchange.
Future of Drone Market: Indian Government’s Efforts
PLI scheme: The Cabinet’s approved a Rs 120 crore performance-linked incentive (PLI) scheme for the drone industry and imposed a ban on the import of drones. India has witnessed a 34.4% surge in the number of drone or UAV startups between August 2021 and February 2022. As of now, over 220 drone startups exist in India.
Released on August 25, 2021, the Drone Rules 2021 has relaxed approvals and other requirements for unmanned aircraft systems to make it easier for civilian drone operators to do business.
Prior to the Drone Rules 2021, the sector saw limited funding opportunities, with B2B startups attracting the bulk of any venture capital interest and overall limited scope for innovation in the industry.
In fact, compared to investment in India’s drone startups (US$16.56 million), China’s drone startups had attracted 14 times more investment at about US$239 million between 2014-18.
Following this, the government released the drone airspace map for India and sector-specific PLI scheme in September 2021 and the National Unmanned Aircraft System Traffic Management (UTM) Policy Framework in October 2021. Ministry of Civil Aviation (MoCA) released the names of 14 drone companies selected as beneficiaries of the PLI scheme.
In her budget speech, Indian Finance minister Nirmala Sitaraman spoke about the Drone Shakti scheme, encouraging drones as a service in our country. The proposed drones-as-a-service (DRaaS) model has the capabilities to revamp and boost India’s fragmented drone industry for new business and employment avenues.
The Union Budget 2022-23 reiterated that the liberalised regulatory framework and manufacturing incentives aim to promote the indigenisation of drone technology in India, whose applications and users are expected to cater to a cross-section of industries.
This industry-ecosystem based approach spins off business opportunities for a wide range of companies upstream and downstream, from bigger firms in allied industries to high-tech startups as well as micro, small, and medium enterprises (MSMEs) – for component manufacturing; developing software applications, enterprise solutions, and counter-drone technology; and the design and assembly of final products. The end outcome will be diversified product lines, finally reaching the level of consumer market appeal.
Serious data security concerns over Chinese drones have landed Indian UAV manufacturers in a sweet spot. Made-in-India drones have started getting export orders from all over the world. Japan’s largest sectoral player, ACSL, has tied up with an Indian company that currently has a manufacturing unit in Tamil Nadu and will shortly open at least two more in other parts of India.
Increasing number of countries are getting uncomfortable with several Chinese drone majors having their servers back home, while the faith in India is very high. The US, for instance, had last year imposed restrictions on Chinese majors like DJI etc.
According to the Drone Industry Insights Report 2020, the worldwide drone industry is predicted to increase at a 13.8% CAGR to $42.8 billion by 2025. India’s unmanned aerial vehicle market is expected to grow at a CAGR of 20.9% between 2020 and 2026.
The Civil Aviation Ministry projects that India’s drone industry could see a total turnover worth INR 120 billion to 150 billion by 2026, assisted by the PLI Scheme, which has a budget allocation of INR 1.2 billion spread over three years. Drone makers in India currently have a turnover of about INR 800 million (US$10.88 million).
Over the next 15 years, the Indian Army plans to induct UAVs down to the battalion level, while the Indian Air Force aspires to have at least six 18-fleet squadrons of both armed and unarmed UAVs. With Requests for Information/Requests for Proposal (RFI/RFP) estimated to be to the tune of 100 a year, developing these advanced electronics in-house reduces imports, with India possibly becoming their exporter to the very countries we buy them from.
Some Civilian Use of Drones
Drones are not only helping the military, but they are also helping businesses with complex activities normally undoable by humans in a timely and effective way. In 2022, the Ministry of Civil Aviation approved a project of the Telangana state government to use drone technology to deliver vaccines in remote areas.
Three-fourths of the export orders are for agriculture drones, and the rest for mapping and inspection.
Garuda Aerospace founder-CEO Agnishwar Jayaprakash said, “The Indian agriculture spray market is valued at $3.2 billion as 40 crore acres is under cultivation here. Drones spray insecticides in a much more efficient manner using less chemicals and water and are not harmful o the person spraying the same as there is not physical contact.”
Aviation Minister Jyotiraditya Scindia said the drone service sector holds tremendous promise and will provide about 1 lakh jobs in the next 4-5 years. “We look at a rapid expansion of almost Rs 5,000 crore in terms of investment into the drone manufacturing space.”
Thus, this is a well thought out vision of PM Modi to revamp Indian defence and economy at the global level. India is strategically increasing its influence in crucial sectors like the UAV industry, which will and is determining the near future equations with the world. Blending technology with nationalistic goals will increase India’s credibility among global strategic sectors.