Manufacturing is key to India’s growth. It can generate employment, infuse FDI and boost exports. One of the sectors that have attracted a lot of interest recently is “Drone Manufacturing”. Though the drone industry in India is still in its infant stage, it is expected to grow and evolve at a rapid pace in the next 10 to 15 years. There are positive signs of long-term sustainable growth in this sector. India witnessed a 34.4% surge in the number of drone or UAV (Unmanned Aerial Vehicle) startups between August 2021 and February 2022. The Indian UAV/ Drone industry was valued at $830 Mn in 2020 and is estimated to expand at a CAGR of 14.5% till 2026. Market research projects, the Indian drone and component manufacturing industry to reach around $23Bn by 2030. NITI Aayog estimates that India’s UAV/ drone market (including services) will reach $ 50 Bn over the next 15 years as drones are projected to substitute 80% of operations presently carried out by manned aircraft.
Indian drone industry on track to become a multi-billion dollar segment
As per the reports, the Drones and drone components manufacturing industry may see an investment of over Rs 5,000 Cr over the next three years. The annual sales turnover of the drone manufacturing industry may grow to over Rs. 900 Cr in FY 2023-24. The drone industry is projected to create 10,000 jobs in the next three years, according to experts. The drone services industry, which includes operations, logistics, data processing, traffic management etc, will create jobs far bigger in scale.
With the change in geopolitics, the use of drone technology in the defence sector has become strategic. The ongoing Russia-Ukraine war and the earlier conflicts between Azerbaijan and Armenia war have brought out the importance of drones both for surveillance & attack aspects in modern warfare. While India has always been dependent on imports of drones for defence from countries like Israel & US, the dependence is slowly making way for indigenous systems with minimal import content. Usage of high-altitude India-made drone for reconnaissance at Line of Actual Control (LAC) with China, a joint venture between an Indian company and an Israeli defence giant operating out, and a Bengaluru-based drone technology venture being acquired by one of a major business conglomerate in India, procurement of Indian made Switch Drones & Swarm drones by Indian defence – gives us a glimpse into India’s burgeoning military/defence drone industry.
Applications of drones:
Despite the fact that drones have conventionally been used for defence/ military applications, advancements in robotics, artificial intelligence, miniaturization, automation, thermal imaging, materials science, etc. have supported various commercial and civilian usage of drones like crop protection, spraying, construction project surveying, filmmaking, healthcare, e-commerce delivery, and more. Traditional methods are generally time-consuming and inaccurate due to human error; utilizing drones in their place can result in considerable cost savings, efficiency, accessibility and durability.
Drones can play a major role in creating value for India’s $600 Bn agriculture sector by providing an effective medium to collect data and apply inputs, directly impacting yields and farmers’ income. Multiple studies have highlighted the immense potential in improving agricultural outcomes for farms through precision agriculture expertise and advisory that can enable a 15% increase in productivity. Scaling drones in the agriculture sector have the potential to boost farm mechanization.
Government’s role in supporting the drone manufacturing industry
Early this year, the Indian government banned the import of drones except for research & development, defence & security purpose. This step is aimed at promoting “Made in India” drones. The ban is likely to hurt those who use drones for recreational purposes like photography and videography for weddings and events. The drones used in these instances primarily come from China because of ease of operation & cost advantage. Indigenizing critical components for drones could be the next step for an “AatmaNirbhar Bharat”. Motors, batteries, carbon fibre for airframes and avionics like Light Detection and Ranging (LiDAR), optical, infrared, and efficient gimbal systems are areas that require focus for technology development.
In addition to this, India has accelerated its efforts to create an ecosystem for drones through the implementation of liberal policies and other initiatives, including drone shakti (Production linked Incentive/PLI scheme), increased Airspace, Drone Certification Scheme 2022, and others, that are collectively supporting the growth in the drone market. These initiatives are expected to create a robust drone manufacturing industry and pave the way for developing services-related markets like maintenance, repair and overhaul (MRO), drone platform services and drone training and education. The PLI Scheme for the Drones and Drone components industry will, over a period of three years, address the strategic, tactical and operational uses of this revolutionary technology. The production-linked incentive scheme leads to investments worth ₹ 5,000 Crore, an increase in eligible sales of ₹ 1500 crore and creates 10,000 jobs.
Though the future looks bright, there is a long way to go to achieve the numbers projected. The government will play a crucial role in growing the domestic drone industry faster than its global counterparts by creating an environment of coordination & cooperation between defence & nondefense enterprises involved in the design, development & manufacturing of drones, simplifying certification, licencing policies/ rules & procurement procedures, financial support/ assistance for start-ups & MSMEs involved in indigenization and promote the use of drones in the country. The industry should take the challenge of developing critical technologies in India and reducing manufacturing costs, making it globally competitive. The indigenisation efforts initiated by the government through a series of policy reforms and financial assistance are set in the right direction. This should help the industry service domestic and export markets.
India’s drone industry will fly high
Drones industry is expected to create significant employment opportunities and drive economic growth. The industry can contribute 1 to 1.5% to the country’s GDP and create 5 Lakh jobs. The rise in the array of drone applications is not only propelling the market but also accelerating the complete drone ecosystem and strong opportunities exist for the localisation of components such as batteries, motors and airframes. We are in a drone-revolution phase now and drone services will see the biggest innovation in the days to come as the services industry will complement data collection with Big data, ML, AI, Cloud and analytics to offer a full-stack solution. However, the industry will require skilled experts, technologists, designers and entrepreneurs who understand the sector’s potential and create a difference. The drone ecosystem is very vibrant in India and the industry is already providing services across many industries such as photography, agriculture, surveillance, mapping and many more.
Drone manufacturing is a sunrise sector, poised for exponential growth, driven by the realisation of multiple use cases across various sectors. India finds itself to be at a critical juncture in the evolutionary timeline of drone technology, wherein we have a time-critical window of three years to understand and develop drone manufacturing to emerge as the drone manufacturing hub of the world by 2030.