Anushruti Singh
India’s drone industry stakeholders are witnessing a marked upswing in their fortunes these days.
Since last year, the drone industry in the country has incorporated a lot of changes and new developments and is decidedly going to be playing a significant role in the economy by all accounts.
Drones in the past few years have penetrated various arenas, especially in the non-commercial applications arena owing to their unique and useful capabilities. Lately, there has been extensive work going on in testing their capabilities for commercial purposes—like trying them out to conduct door to door deliveries in collaboration with the e-commerce industry and the retail sector.
Due to the positive reviews it has generated, the drone industry has attracted the government’s attention too, which is a plus point in every way. In fact, the government has recently announced a plethora of new rules for the drone industry. The people from this industry had lobbied with the government to introduce these changes to make things easier and more practical for both the drone enthusiasts and the industry as a whole.
Here are a few key takeaways from the new rule book— The Indian airspace has been divided into three zones. Paperwork has been reduced from 25 to 5. Both the penalty and the fee have been reduced. Unnecessary approvals have been abolished. No Permission, No Take-off (NPNT) is now a requirement. And a drone must also have a unique id number and a real-time tracking beacon.
These new rules have gelled well with the industry requirements too. This was followed by the PLI scheme announcements worth Rs 120 crores in September of 2021. The market and the industry stakeholders responded very positively to these new rules and the PLI scheme announcements, declaring that they were intended to catalyse the super-normal growth of the sector.
It seems like the ‘acche din’ have finally arrived for the drone industry.
Game changing announcements in 2022
It all began with the national flag, a map of India, and Mahatma Gandhi lighting up the evening sky during the Beating The Retreat ceremony.
These were just a few of the more intricate patterns created by 1000 made-in-India nano drones. Perhaps the government intended to give a hint of the energising future of domestic drones with this mesmerising drone light show.
After only three days, the sector was taken aback by a slew of announcements in the Union Budget for 2022-23. The Drone Shakti scheme gave the sector a huge boost. This focused on facilitating drone start-ups and the use of drones-as-a-service. Furthermore, the finance minister talked about encouraging the use of kisan drones for agricultural purposes.
As various sources lauded the budget, hopes for the growth of this industry skyrocketed. But the story took another turn when the government announced a ban on the import of foreign drones.
The import ban—what it means
“It is a great move by the government,”
“Very encouraging news for the Indian drone ecosystem,”
Indian drone start-ups reacted with such comments, as the news about the ban on the import of foreign drones spread.
A week post-budget, the Directorate General of Foreign Trade (DGFT) issued a notification prohibiting the import of drones, with some exceptions. It allowed for the continued import of components used in the manufacture of drones.
Here is an excerpt from the notification
According to the discussions that we have had with a few people in the know, besides a few short-term blockages, this move is highly pragmatic for several reasons.
To start with, the industry sees this action as a part of the efforts being made to promote indigenous drone manufacturing in the country. Also, this decision will block the Chinese drone maker SZ DJI Technology’s excessive penetration inside India.
Reportedly, Chinese drones have been suspected of clandestinely passing on critical information to sources that are inimical to the country. However, this certainty is not subjective. In fact, the government’s actions say a lot about it’s seriousness regarding national security.
Focusing on indigenous manufacturing
Furthermore, from drone manufacturers to drone users, all are of the opinion that these rules and decisions will revolutionise the landscape of the indigenous drone industry and will serve as a stepping stone for ushering in further innovations in the sector.
“Seeing the potential of drone analytics in the near future in terms of confronting the challenges of scientific problems and revenue; it is high time to take a clear call on encouraging drone manufacturing in India. Hence, it is a welcome and appreciable move,” says Navneet Ravikar, Chairman & MD at Leads Connect Services that uses drones for its field tracking and other operations.
The company is also soon to launch its own drone services and will also develop drone pads in certain states and is very excited about this decision.
Shipsy, a new age logistics solutions company which is continuously experimenting to integrate drones as their new delivery mode, is also quite optimistic about this move.
Dhruv Agrawal, its Co-founder says, “From a long-term perspective, definitely it’s a good move. The reasons for that being many. We want to become an export first economy. We want to build in India, optimise technology and empower Indian SMEs and corporates to export efficiently. Adding to that, it’s even a good push for the Indian manufacturing sector to develop high quality hardware.”
Drone manufacturer Garuda Aerospace reports a massive number of enquiry calls. “We are now getting calls from various companies on exploring opportunities. Now drone users/operators would have to deal with those having drone manufacturing facilities,” Garuda Aerospace Founder and CEO Agnishwar Jayaprakash told a media agency.
The city-based Drones-As-A-Service (DaaS) start-up is putting up drone assembly units at Manesar in Haryana’s Gurugram and Tamil Nadu’s Hosur at an outlay of $3 million. “Both the plants together will have a capacity to roll out about 60-70 drones per day,” Jayaprakash said. He said that Garuda Aerospace will follow the automobile industry practice of sourcing assembled parts.
But the current drone value chain comprises of drone manufacturers, software, and service delivery. And the thing is that India only assembles the finished product in the domestic assembly lines.
“With so many socially impactful use cases across the country, how long can we rely on borrowed technology and expertise?” asks Vipul Singh, Founder and CEO, Aarav Unmanned Systems (AUS).
He maintains that it is a good decision because it will help us to reduce our reliance on other countries.
According to him this step aims to increase the number of locally made drones and master the entire value chain.
“We see this import ban as a powerful step in making India self-reliant. And there is a huge potential for India to become a big exporter of drone technology in the near future. We are definitely on track to enable more technology creation in India and truly Make in India,” Singh enthuses.
Impetus to self-manufacture components
As of now, we are massively dependent on the US, China, and Europe for specific components for drones. For components like BLDC motors (brushless motors) and electronic controllers, for instance.
“This country manufactures a total of zero BLDC motors,” points out Subhashis Banerjee, Chief Investment Officer, ARTPARK, a foundation created by the Indian Institute of Science to promote innovation and make AI and robotics available to every Indian.
Banerjee explains that BLDC motors are a critical component of drones, as for flying objects, power to weight ratio matters. And because brushless motors are small, they provide more power while weighing less.
Drone manufacturers primarily rely on Chinese motors for this component, which are easier to import. However, Banerjee’s example of the US explains why India needs to empower domestic assembly lines to manufacture BLDCs and why the decision to ban drone imports aligns with this thought.
“Some years back, BLDC motors used to be manufactured in only three countries, China, Taiwan, and Germany. And since the US trade tussle with China, the US government also began manufacturing them, reducing their reliance on China. For instance, Lockheed Martin, the airplane company, have been manufacturing BLDC motors for the last two and a half years now. But the US does not export them. So, just to make sure that India does not go through a supply fleet disruption, now it’s more important to up our game in domestic manufacturing, as we depend on other regions for critical components,” elaborates Banerjee.
Similarly, along with BLDC motors, drones also need electronic controllers to work. According to Banerjee, if you don’t buy the motors and the ECs from the same company, they will invariably have compatibility issues. “It’s just like windows, where programmes like MS Word or Excel work. While without windows they will not work. It’s the same for BLDCs and ECs,” explains Banerjee.
Simply put, Banerjee emphasises that domestic manufacturers have to do a lot more than just manufacture BLDCs in India. They need to work on ECs as well. While this may take some time, this decision will ultimately lead to the betterment of this industry and will positively affect the overall economy of the country as well.
Delivery drones: the future beckons
Let’s talk about the consumption part. From defence, agriculture to weddings, drones have penetrated into many sectors. The healthcare, retail and logistics sectors too are heavily investing in them for long term benefits. For example, the industry players in the west are already leveraging drones as alternative and scalable delivery models.
Experts feel that the drone delivery or quick e-commerce segment is going to be a huge market. And the government’s decision has only upped the ante for this sector.
We are saying this on the back of media reports on drone deliveries. Recently, Zypp Electric, a last mile delivery firm announced that it will start making deliveries using drones in some of the largest Indian cities, making it one of the early adopters of drone deliveries. The company has partnered with TSAW Drones to deploy 200 drones across five cities.
“Drones will act as an extension to our ground fleet of e-scooters to deliver goods at long distances in 1/10th the time needed,” quotes Akash Gupta, Co-founder and CEO of Zypp Electric.
Similarly, Shipsy has plans around delivery drones as well, said Agrawal, but he refused to disclose the details to us. “We are working on it with our partners and drone manufacturers. We are building something together for the retailers or hyperlocal delivery companies to enable them to adopt this technology much faster,” he says.
The delivery partners’ perspective on this decision is that other economies, regardless of whether they have a technological advantage or not, do not have policies in place to support it. However, India has been rather quick to achieve this feat. This will allow the sector to leverage these policies in a better way.
“India’s topography is diverse, which also makes navigation difficult. With drones, delivery problems could be solved in no times. Take healthcare as an example. We could save many lives with drones and there are many use cases of that as well. Similarly, the local delivery market is becoming a huge trend. Overall, the landscape evolving at such a pace is something that we haven’t seen before. I wouldn’t be surprised if we see drone deliveries happening sooner rather than later,” comments Agrawal.
Short term challenges will not affect the optimism
Initially, the announcement of a blanket ban raised a few red flags, at least in terms of the short-term challenges it could entail. We inquired as to whether the importers would be affected by this or not. Was this ban likely to be more of a hindrance than a boon for the innovators and the sector? Or would the domestic players be able to scale up to meet the government’s objectives?
“If you are asking me that whether this ban will be there for a long time? Unlikely. Will it be there for some time? Yes. Will that help the domestic ecosystem? Yes. Some people will shout, let them shout,” is Banerjee’s forthright response to these questions.
He strongly feels that it’s all about perspective.
“It is always difficult to enter mature markets. Today, if somebody says we have to do aeroplane manufacturing in India, it’s not happening. The same goes for drones. The drone sector might be small today, but it’s going to be huge tomorrow. And initially if we lose the race, we will not be able to catch up later,” he adds.
That is why it is the right step taken at the right time; he adds.
“Look at the large picture. Sam Pitroda brought the IT revolution to India. If he had not done so, we would have been behind as all our prosperity comes largely from this industry. So, for developing an ecosystem with a global reach and to keep up with the global players at the same time, it’s a necessary step. You create an environment where importing becomes a hassle and ultimately it will trigger local manufacturing. That is the way I look at it,” elaborates Banerjee.
Talking about the possibility of a void in innovation due to this blanket ban, Ravikar states that there are lesser chances of that happening. “Timing is very important for creating impact ripples in the market and for innovation, and this is the right time when India can take the lead. So instead of focussing on our fears, we should look at the possibilities,” he points out.
“We need to understand and trust that there is huge potential in the domestic market. Time and again, our local resources have proved that they can thrive if they get a chance and the right platform. For instance, during the pandemic, there were a lot of apprehensions about the growth of the agritech sector. But this sector proved the naysayers wrong and thrived phenomenally,” he adds.
However, there are legitimate concerns about addressing the issues of those companies that are currently reliant on drone imports.
At the same time, it is also essential to understand that a shift in the market mindset is required.
Just to make the going easier for themselves, Ravikar suggest that these companies could begin working on establishing a working channel with the domestic players. Furthermore, they should begin discussions with the relevant authorities to establish a time frame for establishing this channel and begin preparing themselves accordingly.
The road ahead
According to a July 2021 report by BIS Research, the global drone market is currently dominated by the US, China, and Israel. Its value is estimated to reach US$ 28.47 billion in FY21-22. However, India’s share in it is miniscule and accounts for a mere 4.25 per cent of the total.
Adding to it, the market size for drone services is expected to reach US$ 40.7 billion by 2026 from USD 13.9 billion in 2021, at a CAGR of 23.8 per cent during the forecast period. Indicating for India the potential to create a greater drone economy.
Meanwhile, following the import ban, the civil aviation ministry made yet another significant change to the new drone laws. A Remote Pilot Certificate is no longer required to fly small to medium-sized drones weighing up to 2 kg for non-commercial purposes. And a Remote Pilot Licence is not required to fly drones weighing more than 2 kg for commercial purposes. Instead, a Remote Pilot Certificate will suffice. This certificate can now be issued to anyone by an authorised remote pilot training organisation, according to the new regulations.
This step is being viewed as a positive one for the growth of the drone sector because it makes it easier for people to legally fly drones for non-commercial purposes. Taking all these things into account, the prospects for the future of the drone industry in India are looking bright and rosy.
