Governance Structure: Manufacturing Drone & its Components in India
The government has carefully implemented many changes, including Production Linked Incentives for the drone industry, regulatory streamlining, and the recently announced import ban on drones, with the goal of making India a drone hub by 2030. Following the announcement of drone regulations in August 2021, a number of experts expressed confidence that the Indian drone market might reach INR 500 billion during the next five years. Additionally, the Civil Aviation Ministry predicts that by 2026, the Indian drone market will generate between INR 120 and INR 150 billion in revenue. The government intends to invest INR 5,000 crore and generate over 10,000 new jobs in the drone manufacturing sector over the course of the following three years.
Government industrial policy
The ability of the drones to create awe-inspiring images such as the “Make in India” lion has clearly demonstrated the inherent strengths of the Indian drone industry and was symbolic of the government’s endeavour to make India a “global drone hub”.
- The use of drones in India has spiked over the last few years. Considering the various commercial and noncommercial uses of drones such as in agriculture, aerial cinematography, mining activities, mapping of national highways and disaster management.
- For greater job opportunities in India, the Government has banned the import of Drones. The only exceptions of drones that will be authorised to be imported would include those imported by government entities, educational institutions recognised by the federal or state governments, government-recognized R&D firms, and drone manufacturers for research and development as well as defence and security objectives. While the import of finished drones has been banned, the import of drone components has been made free. This essentially means that domestic or local manufacturers would not need an approval from the DGFT to import parts like chips, ion batteries etc.
- The government’s efforts to promote “Make in India” and “Atmanirbhar Bharat” were underlined in the Union Budget 2022–23, which included “Drone Shakti” and “Drone-As-A-Service” as important promises. The government’s increased emphasis on using “Kisan Drones” for tasks like crop inspection, digitising land records, spraying insecticides, etc. may also cause a dramatic rise in demand for drones. India currently imports drones from the US and Israel primarily to suit its defence requirements. While it is still possible to import drones for defence purposes, this new program will provide “Atamanirbharta” in defence some much-needed momentum.
- At a time when innovations in the drone industry are growing by leaps and bounds and investments in the drone industry are increasing by manifold, indigenising in drone production would be an important step in making sure that India is well equipped to deal with a surge in demand, as well as, the global competition that may come up in the field in the future. To cite a few examples, the new drone laws have led to increased traction in the market wherein numerous companies have been quick to leverage their technological know-how to capitalise on this new drone wave in India. Amazon has recently approved order delivery through drones. Swiggy, a food delivery platform in India has also received a go-ahead from the Directorate General of Civil Aviation and the Ministry of Civil Aviation in June last year to begin trials for drone food deliveries using “Beyond Visual Line of Sight” drones. his rapid pace of investments and technological innovations in the sector will result in consumers getting access to cutting edge products and services at affordable prices.
The eligibility criteria for application under the PLI scheme for drones and drone components includes an annual sales turnover of INR 2 crore for drone companies and INR 50 lacs for drone components manufacturers; and value addition of over 40% of sales turnover.
Eligibility criteria for application
Governmental organisation involved
The regulatory framework required for drone use in commerce is provided by the Drones Rules, 2021, which were announced on August 25, 2021. These regulations cover a variety of topics, including drone type certification, drone operation registration, airspace limits, drone research, development, and testing, training and licensing, offences, and fines.
The government wants to help people and businesses make the most of drone technology, which is why it has just liberalised its drone policy. Some key enhancements of the new Drone Rules, 2021, policy are as follows:
- Reduction in the licensing fees irrespective of the drone size. For example, the remote pilot license fee, which was Rs. 3,000 (US$ 40.14) for a large-sized drone, has been reduced to Rs. 100 (US$ 1.34) for all drone categories
- No pilot licence requirement for non-commercial micro drones and nano drones
- Relaxation on various approvals and certificates pertaining to conformance, manufacturing, airworthiness, maintenance, import clearance, acceptance of existing drones, operator permit, authorisation of R&D organisation and student remote pilot licence
- Abolition of approvals such as unique authorisation number and unique prototype identification number
- Type certificate and unique identification number required only for drones operating in India, but exemption granted for drones that are imported or manufactured only for export purposes
- Drone corridors to be developed for cargo deliveries
- Setting up a drone promotion council for exchange of healthy business communication
- Revoked flight permission requirements up to 400 ft. in ‘green zones’ and up to 200 ft. in the area ranging 8-12 kms from the airport perimeter. Green zones refer to the airspace up to a vertical distance of 400 ft.
- Digital sky platform will be launched as a single-window online system to ease business operations and streamline processes. An interactive airspace map will be launched on this platform, showing red, green and yellow zones, specifying the operation of drones
- Easy process of transfer and deregistration of drones
- Maximum penalty for violations has been reduced to Rs. 1 lakh (US$ 1338.13)
- Facilitate ease of doing business for foreign-owned companies operating in drone business but are registered in India
Amount of benefits can be received from the government under PLI scheme
- It covers a wide variety of drone components, including airframe, propulsion systems, power systems, batteries, inertial measurement unit, flight control module, ground control station, communication systems, cameras, sensors, spraying systems, emergency recovery system, and trackers.
- It is expected to bring fresh investments of over Rs 5,000 crore and incremental production of over Rs 1,500 crore and create additional employment of about 10,000 jobs.
- It will encourage and motivate entrepreneurs to strive towards building drones, components, and software for the global market. It will also open many more verticals for the utilisation of drones.
- It will help reduce imports. The import ban will allow Indian manufacturers to first have control over design, IP and software and then over a period of time will enable them to undertake further indigestion.
- It will contribute towards reducing carbon emissions and oil imports.
- It will encourage production of auto components using advanced technologies that will boost localisation, domestic manufacturing and also attract foreign investments.
- It will help setting up new facilities and create more jobs. It is expected to generate 7.5 lakh jobs for the auto sector.
- The Indian Army has already been working in collaboration with the Society of Indian Defence Manufacturers for over two years to reach out to startups in the field of emerging technologies like Drones, Counter Drones, Robotics, Artificial Intelligence and 3D printing.
- The annual sales turnover of the Indian drone manufacturing industry is predicted to increase from approximately INR 60 crore in 2020–21 to approximately INR 900 crore by 2024–25 with the implementation of the Production-Linked Incentive (PLI) scheme, the liberalised drone rules, and the drone import policy.
- The government intends to make India into a global drone hub by 2030.
The domestic drone business has recently received a major boost from our government. By doing this, the government hopes to grow both the drone manufacturing industry and the rapidly expanding drone services industry. A spike in drone demand is anticipated over the next several years as corporations and start-ups are anticipated to expand their investments in this area. This demand is predicted to increase from many industries, including agriculture, defence, retail, and e-commerce. In addition to facilitating a thriving manufacturing sector, it is envisioned that India would develop into a one-stop location for any foreign investors looking to participate in the drone industry in the upcoming years.
Ananya Khar
Ananya Khar is a Research Intern at Tatvita. Presently she is pursuing his bachelors in the Liberal Arts department at the Savitribai Phule Pune University.
