Will India’s changing drone policy cripple the nascent industry?

Till a few years ago, India, bound by restrictions and plagued by a lack of technology and talent, was no country for drones. In August 2021, the government liberalised its drone policy. In the past fortnight, hope has grown manifold in the field.

First, the public conversation is favourable.

Finance minister Nirmala Sitharaman, in her February 1 Budget speech, encouraged the use of kisan (farmer) drones for crop assessment, digitisation of land records and spraying of insecticides and nutrients. The Budget also cited opportunities for startups to offer drone-as-a-service in sectors beyond agriculture. It is already happening in defence, logistics, health care and more.

Secondly, there has been a concerted effort to nourish a local ecosystem.

To boost domestic manufacturing, the civil aviation ministry on February 9 banned the import of drones (albeit with exceptions in research, defence and security fields).

Two days later, to minimise red tape, it scrapped the drone pilot licence requirement. Pilots can now get remote pilot certificates from one of the 12 directorate general of civil aviation-approved drone schools via the single-window DigitalSky Platform instead of seeking licences from the regulator. Even that is not needed to operate non-commercial drones weighing under 2 km.

“This would save cost and time and help in the betterment of the ease of doing business in India,” said Vishal Saurav, CEO and founder of drone manufacturer VFLYX India.

There is a caveat, though: nearly 90% of India’s unmanned aerial vehicles are imported, according to Mughilan Thiru Ramasamy, CEO and co-founder of Skylark Drones.

“For the drone ecosystem to flourish and for innovative new use cases to emerge, access to high-quality and economically priced drone hardware is critical,” Ramasamy said. “It will be curious to see how the industry adapts and addresses this development which could, temporarily at least, derail some well-laid plans.”

Fine print

The bulk – almost 70% – of drones used in India come from China, according to Gautam Vohra, vice-president and business head for telecom and engineering staffing at TeamLease Services. Besides being a bid to realise the Make in India vision, the ban is likely also politically-motivated, he said.

But supplanting its neighbour will not come easy. China’s manufacturing capabilities are far superior to India’s. So is its semiconductor industry. Most made-in-India products are technically only assembled-in-India, with parts sourced from – you guessed it – China.

Luckily, the drone import ban only affects completely built-up, completely knocked down and semi-knocked down units. Components can still be imported.

“If I am individually ordering 40 motors from an international supplier, that is allowed,” Swapnik Jakkampuddi, co-founder and COO of Skye Air Mobility, told Quartz. “So it is not going to stop availability. It will just give more incentive to existing and new companies to step in and fill in that gap.”

Besides local companies, international firms, too, can set up production facilities in India.

India’s drone industry

India’s drone industry is set to grow from Rs 80 crore now to Rs 900 crore over the next three years.

The commercial use cases will create significant employment. “Even if there are some hiccups in the short-term, in the long term, it will create significant job growth,” said Vohra of TeamLease.

Beyond pilots, there will be roles for technicians at drone companies, shop floor workers in manufacturing and after-sales support personnel. The adoption of unmanned aerial vehicles can be accelerated if the government offers more specific production-linked incentives and tax rebates.

“Currently, there is a huge gap in the available and the required drone components and component designs,” said Nitesh Jain, founder and CEO of coding academy BeSingular.

“Government agencies like Hindustan Aeronautics and National Aerospace Laboratory should be proactive in supporting the development of the country’s drone ecosystem,” Jain said. “These agencies have years of knowledge in this department. They have advanced labs and engineers. In order to accelerate the successful localisation of drone manufacturing, their assistance and mentorship are crucial.”

Fortunately, government outfits like the airport authority of India and the ministry of home affairs are increasingly open to a conversation even as industry players hope for more support, according to Skye Air’s Jakkampuddi.

This article first appeared on Quartz.