Why India's Drone Industry Will Fly High Experts believe that the amended Drone Rules opens up avenues for commercialization and the PLI scheme will boost made-in-India drone production and drones-as-a-service

With an aim to make India a global drone hub by 2030 and to generate job opportunities by ensuring drone application in transportation, logistics, defense, mining, infrastructure and other sectors, the Indian government notified Drone Rules, 2021 in August last year. This announcement by the ministry of civil aviation was looked at as a far more liberalized regime for unmanned aircraft systems than what existed before.

Moreover, last week, the government of India said that incentives worth INR 120 crore would be provided by the Central Government for the manufacturing of drones and drone components over the next three years under the production-linked incentive (PLI) scheme.

"The new Drone Rules will tremendously help startups and our youth working in this sector. It will open up new possibilities for innovation and business. It will help leverage India's strengths in innovation, technology and engineering to make India a drone hub," Prime Minister Narendra Modi had tweeted.

The new Drone Rules 2021 aimed to open up a plethora of opportunities for the drone sector. Many sectors such as construction, agriculture, survey, inspection and mapping, surveillance, delivery, disaster response, mobility, among others were expected to reap the benefits the most.

Impact of new Drone Rules 2021 and PLI

Experts believe that the recently amended drone rules have liberalized the drone segment and have opened up a lot of avenues for commercialization. "The new rule will not only help expand the segment but will also help in technology advancement as the people can now freely work on technology without fear of not being able to implement or commercialize. The new rules are a very positive step for the segment," said Anil Joshi, managing partner, Unicorn India Ventures.

Garuda Aerospace, a drone startup, firmly believes that it would be the biggest positive benefactor of the PLI scheme. "The scheme promises all service providers and student entrepreneurs who want to use drones to provide drone-based services to customers as the drones will start to become less expensive and equipped with far more quality as many drone manufacturers will compete to provide the best products. Agri drones have been proven to increase food crop productivity, reduce crop loss, reduce 70% usage of pesticide, Reduce 80% usage of water & reduce farmer or laborers' exposure to harmful chemicals while administering Pesticide spraying," said Agnishwar Jayaprakash, founder and CEO, Garuda Aerospace.

Swapna Gupta, partner, Avaana Capital feels that the recently announced PLI scheme will complement the Drone Shakti program mentioned in the Budget 2022, to boost made-in-India drone production, as well as drones-as-a-service. "These measures will provide an impetus to the growing industry and bolster widespread adoption. At Avaana, we are highly bullish about different business models and use cases for drones to solve for climate and sustainability," she said.

The two most common business models in the sector include agriculture and surveillance. "Software layers built on top of multi-purpose drones can have applications in predicting and monitoring extreme weather conditions like wildfires, flash floods etc. Intra-city and short-distance logistics is another emerging use case to help reduce transport emissions. We are excited to see drones enable increased automation and digitization, and becoming a vital part of our economy," said Gupta.

Investor interest in the segment

Investors were hesitant earlier about pouring money into the sector. However, with the new policy, the segment has opened up and is expected to grab more investor attention with time "The segment is quite big and offers a lot of scope for scale. India alone is quite a big market coupled with overseas markets. The segment really offers good scope for many companies to survive. But like any industry, as it will mature the consolidation will also start," said Joshi.

The drone segment is also expected to open up employment opportunities, not just in manufacturing, but also in services. "India may sound small and niche compared to other markets but with time it will gain traction and will gain a prominent position not only in numbers but also in quality and technology," said Joshi.

The only challenge today, according to Jayaprakash, is the enable willingness of foreign tech giants in cementing OEM partnerships with Indian Drone Startups to bridge the technology divide. "It is essential for companies to keep evolving and constantly innovating," he said.