India aims to become a global drone hub by 2030. The civil aviation minister recently said that the Indian drone industry could see its valuation climb to Rs 3 lakh crore by 2030, generating employment for at least 3 lakh people. A slew of positive announcements related to the segment has made industry players hopeful of achieving this staggering growth. Smit Shah, President, Drone Federation of India sat down with DH’s Lavpreet Kaur to discuss the latest in the drone space, the status of indigenous manufacturing of drones, challenges tied to last-mile delivery with drones, and the outlook for the next five years.
Edited excerpts.
How has the drone industry in India evolved in the last decade and what drove it?
Four key actions that have led to the growth of the industry are- liberal policy in August 2021, production linked incentive scheme with an outlay of Rs 120 crore of which about Rs 29.4 crore has been distributed already along with the financial incentive and ease of doing business, prohibition on import of drones forcing the system to create intellectual property (IP) locally and the government (state and central) as the biggest customer and hence, the market maker.
How do the new drone rules compare with international regulations? What would accelerate the commercial use of drones?
Indian drone regulations compete in the top three ecosystems across the world that are enabling the foundational applications of drones from all perspectives. We have almost everything from a bedrock and foundation perspective, however, from a scale-up perspective there are some gaps like the operational issues within the existing policies that need to be slightly streamlined for increasing operational efficiency, ensuring enforcement of compliance of the existing ecosystem, type-certification for beyond visual line of sight (BVLOS) operations and traffic management of drones.
How many drone manufacturers are currently in India? What’s your reading of the R&D landscape?
There are 100+ manufacturers in India who are building different types of drones. The CAGR is more than 50%. The big jump is however owing to the legalisation of drones.
We have enough labs and academic institutes doing enough work. A few industry players are also doing it. What is required is the coming together of all these stakeholders to do focussed and accelerated R&D, especially in the materials and sub-component domain.
What is the most preferred application of drones in India and where have you seen most demand coming from?
From the revenue and value perspective, defence and homeland security sector is priority one. However, from the scale of operations perspective, it is the commercial sector that has seen the most advantage. Agriculture is picking up very, very fast and will soon become approximately 40% of the market share in the next 2-3 years of time.
How effective is the counter-drone technology available in India?
The counter-drone technology in the world is actually very new, especially addressing small drones. If you bring in a huge military drone of course there are decent radars and weapons that will detect and shoot it down. It is quite effective right now for 3-5 kilometres but when you talk about very small drones and larger distances, technology is still being optimised.
Do you see any major challenges tied to the adoption and application of last-mile drone delivery services?
One challenge is the enabling aspect where that certification scheme for BVLOS operations needs to come in. From an application perspective, areas like healthcare and essentials are a very high priority followed by cargo. Quick commerce will quickly catch up when the technology is optimised and the cost of operations starts going down.
What is your outlook for India’s drone market?
In the next five years the industry will see exponential growth driven by demand and ecosystem. In my opinion, it will be a 5-10X growth every year for various industries. Post that, the exponent will remain but not a sharp rise.