Will India’s changing drone rules cripple the industry before it can take flight?

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 Feb. 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’s already happening in defence, logistics, health care, and more.

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

To boost domestic manufacturing, the civil aviation ministry on Feb. 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 (RPC) from one of the 12 directorate general of civil aviation (DGCA)-approved drone schools via the single-window DigitalSky Platform instead of seeking licences from the regulator. Even that isn’t needed to operate non-commercial drones weighing under 2 kilograms.

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

There’s a caveat, though: Nearly 90% of India’s unmanned aerial vehicles (UAVs) 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. “

The fine print of India’s drone import ban

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 won’t 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 (CBU), completely knocked down (CKD), and semi-knocked down (SKD) units. Components can still be imported.

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

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

Will the Indian government help drones fly high?

India’s drone industry is set to grow from Rs80 crore now to Rs900 crore ($10 million to $119 million) 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’ll create significant job growth,” said Vohra of TeamLease.

Beyond pilots, there’ll be roles for technicians at drone companies, shop floor workers in manufacturing, and after-sales support personnel.

The adoption of UAVs 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. 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,” Jain said.

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

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