In today’s world, drones, also known as unmanned aerial vehicles (UAVs), have the power to propel a nation’s economy to new heights. India’s drone market has been witnessing significant growth in recent years, driven by technological advancements and increased adoption across various sectors. Moreover, as airspace management regulations become more relaxed and rounded, India is tapping into new growth opportunities and opening new markets using UAVs.
Evolving drone technology
Drones were initially launched in India as defence equipment, but their use cases have evolved over time. Drones can now transport anything and everything, including vaccines, medical supplies, gadgets, food and groceries. They are bridging the gap in terms of accessibility, especially where roads and other means of transport are not available.
Using drones instead of traditional methods can lead to significant cost savings and widespread adoption, while also increasing the value of the information received. This is because traditional methods are time-consuming and prone to human error. Drones have also found use in healthcare, project monitoring, Industry 4.0 and logistics, thus helping create a drone-as-a-service (DaaS) model within the sector.
A look at the recent developments and policy initiatives in the drone segment in India…
Recent developments
Drone technology has sparked a revolution in the country. Through the integration of 5G and communication technology into drones, their connectivity, data speed and range of data transmission have been improved, while latency has been reduced. In January 2023, IG Drones, an Odisha-based start-up, developed India’s first 5G-enabled drone. This drone can perform vertical take-off and landing and can be used in various sectors, such as defence and medicine.
The integration of artificial intelligence (AI) and machine learning with drones and UAVs has also led to the development of intelligent and autonomous systems for operations such as navigation and decision-making. AI-powered drones can be used for autonomous navigation, image recognition and data analysis. Drones can also use AI to detect crop conditions, identify pest infestations, estimate yield, monitor livestock count in animal husbandry and effectively detect objects in surveillance.
Currently, the agribusiness and infrastructure sectors are the main users of drone technology. There are several reasons for the continued growth of the drone industry, including the popularity of drones, supportive government policies and the proliferation of drone-centric start-ups.
Moreover, during the India Mobile Congress (IMC) 2023, the prime minister highlighted the need for technological advancements in the industry. Academics and start-ups also showcased a variety of use cases for drone technology.
Policy initiatives
Government policies are among the primary elements that have induced investor interest in the sector. The Ministry of Civil Aviation’s (MoCA) Drone Rules, 2021 are at the forefront, having simplified drone regulations and fostered a conducive environment for the industry’s growth. In August 2021, the ministry issued liberalised drone rules, which have labelled around 90 per cent of the country’s airspace as a “green zone” and allowed drones to operate at a vertical distance of up to 120 metres, among other measures. The rules have also abolished the need for registration and security clearances to operate non-commercial drones in green zones, thus promoting the industry’s growth.
Furthermore, as part of the Atmanirbhar Bharat policy, the government has approved the production-linked incentive (PLI) scheme with an allocation of Rs 1.2 billion, spread over three financial years, for drones and their components. In another remarkable move, the budget for fiscal year 2022-23 introduced the Drone Shakti scheme to promote start-ups for DaaS. In addition, the Kisan Drones scheme has also been introduced to promote drone technology for the digitisation of land records, crop assessment, and spraying of pesticides and insecticides. To encourage manufacturing, research and innovation, the government has also liberalised import and foreign ownership of Indian drone companies.
The government has announced drone operation courses at Industrial Training Institutes in all states. Further, several government and private institutions have started training programmes. In February 2023, the DGCA approved 44 drone training schools across the country, and these schools have so far certified 2,521 drone pilots.
In an effort to bolster the growth of the Indian drone industry, the government has further relaxed the provisions for obtaining drone pilot certificates under the newly notified Drone Amendment Rules, 2023. Additionally, the Digital Sky platform, an online portal for drone registration and permissions, has been streamlined to provide quicker and more efficient services.
In 2023, the union cabinet approved a central sector scheme for the provision of drones to women self-help groups (SHGs), with an outlay of Rs. 12.61 billion for the period 2024-25 to 2025-26. The scheme aims to provide drones to 15,000 women SHGs during the period 2023-24 to 2025-26, which would then be rented to farmers for agriculture purposes.
The government has ambitious plans to make India a global hub for drone technology by the year 2030 and to expand the use of drones in a variety of fields, including healthcare, the military and infrastructure.
Private initiatives
In 2022, Asteria Aerospace, a subsidiary of Jio Platforms, launched its end-to-end drone operations platform, SkyDeck. SkyDeck is a cloud-based software platform that delivers DaaS solutions for multiple industry verticals such as agriculture, surveys, industrial inspection, and surveillance and security. Further, Optiemus Infracom has announced the launch of new drones designed and manufactured in India. The company showcased its diverse range of drones at the IMC 2023. It will be investing Rs 250 million in this space.
Several other companies are working towards establishing their presence in drone manufacturing. Recently, in October 2023, TechEagle, a drone delivery start-up, joined hands with AIIMS Bilaspur to ensure healthcare access for remote and underserved communities via drones.
Drone market in India
The drone sector is a sunrise sector in India, with the potential to significantly impact defence, surveillance, internal security, disaster management, agriculture, healthcare, geospatial mapping, mining, infrastructure, aerial photography and cinematography, and many other areas.
In recent years, the government’s Atmanirbhar Bharat initiative has provided a significant boost to the domestic drone sector. Additionally, pilot permit waivers, simplified procedures, the creation of new drone corridors, incentives for local manufacturers, and partnerships with corporations are likely to allow drones to transform the scenario across numerous industries in the country. Moreover, the government aims to develop not only the drone manufacturing industry, but also the thriving drone services sector.
MoCA estimates that over the next three years, the drone and drone component manufacturing industry may witness an investment of over Rs 50 billion, and the annual sales turnover of the industry may grow from Rs 600 million in fiscal year 2020-21 to over Rs 9 billion in fiscal year 2023-24, generating over 10,000 direct jobs. Additionally, the drone services industry, which covers operations, logistics, data processing, traffic management, etc., is predicted to grow to over Rs 300 billion during this period.
The government’s efforts such as the implementation of liberal policies, the Drone Shakti and PLI schemes, and increased airspace are collectively supporting the market’s growth. The market for drones in India is projected to grow at a compound annual growth rate of 10.23 per cent between 2023 and 2028.
Emergence of start-ups
India has experienced a significant increase in the number of drone/UAV start-ups, with a surge of 34.4 per cent between August 2021 (157 start-ups) and February 2022 (221 start-ups). Currently, there are over 330 drone start-ups in India.
In fiscal year 2022-23, drone start-ups received $49.7 million in investments across 20 rounds, compared to the $ 25 million received in financial year 2021-22 across 23 rounds.
As per the data released by the Federation of Indian Chambers of Commerce and Industry, the drone manufacturing potential in India could be $4.2 billion by 2025 and $23 billion by 2030, making India a drone manufacturing hub. There are also strong opportunities for the localisation of components such as batteries, airframes and motors.
Future outlook
India has the potential to become a global drone hub by 2030. However, there are several issues that need to be addressed, such as privacy concerns related to aerial surveillance, security threats, airspace congestion, safety concerns, regulatory challenges, limited flight time, battery constraints and the high initial costs for advanced systems. The use of drones may also have an impact on the environment, such as increased noise pollution, air pollution and disturbance of wildlife.
To fully realise the potential of drone technology, it is essential that financial technology (fintech), AI and drone companies work together through strategic partnerships and alliances. This will help position India as a global leader in drone technology and stimulate the growth of the drone industry, including the development of DaaS solutions that can help businesses better manage their costs.
