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Drone industry thrives in 2022, calls for continued government support in 2023

For 2023, the industry wants government assistance in establishing manufacturing industries for drone components such as batteries, an increase in subsidies and outlay of production-linked incentives, the introduction of a service-linked incentive scheme, and so on.

December 28, 2022 / 09:57 AM IST
Representative image

Representative image

The drone industry had reason to rejoice in 2022. From Finance Minister Nirmala Sitharaman launching Drone Shakti, a mission to make India a drone hub by 2030, to Prime Minister Narendra Modi emphasising the technology's use in fields such as agriculture, the nascent industry has received support from the government, industry, and allied sectors.

In a September EY-FICCI report titled "Making India the drone hub of the world," the manufacturing potential of India’s drone industry was pegged at $23 billion approximately by 2030. The report said that with proper manufacturing and investment, India can become the world's drone hub by 2030.

Despite the industry's positive outlook, there are some areas where more government intervention would be beneficial. For example, India does not currently manufacture 100% indigenous drone technology. Recently, a few startups have been called out for rebadging foreign drones and passing them off as made in India.

For 2023, the industry wants government assistance in establishing manufacturing industries for drone components such as batteries, an increase in subsidies and outlay of production-linked incentives, the introduction of a service-linked incentive scheme, and so on.

The year that was

“Since the beginning of this year, the drone sector in India has seen a significant boost because of the issuance of "New Drone Rules 2021" by the government. Several government programmes have been put into place as well, such as the PLI scheme for drones and drone components, the Drone Shakti scheme, the Kisan drones scheme for land mapping, spraying of agricultural fertilisers, remote tracking of crops, etc,” Prateek Srivastava, founder and managing director at DroneAcharaya Aerial Innovations, told Moneycontrol.

The government proposed amendments to the drone export policy in September, and earlier this year, the Indian government granted IoTechWorld the first Type Certificate under the new drone rules. Later, the government granted Type Certification to Reliance-backed Asteria Aerospace and Adani-backed General Aeronautics. According to Drone Rules 2021, Type Certification is required for regulatory compliance.

In 2022, many private players, encouraged by the government's interest in the drone industry, offered a vast array of services, including food delivery, logistics, medicine and diagnostic delivery, and more.

For example, Indian Immunologicals used drones to deliver vaccines in Arunachal Pradesh in November; Madhya Pradesh Power Transmission Company Limited announced in September that it would deploy drones to monitor 10,000 high voltage towers; and Drone Federation of India announced in August that it would assist the Indian Army in adopting drone, counter-drone, and associated technologies.

There was a lot of activity in the logistics sector, with companies like Skye Air Mobility delivering frozen foods and diagnostics, and Tech Eagle delivering medicines in Meghalaya.

This increased adoption of drones in both the private and public sectors resulted in significant funding for the industry. Skye Air, for example, raised $1.7 million led by Chiratae Ventures. Garuda Aerospace, based in Chennai, has raised $5 million in funding from a group of investors.

EndureAir Systems, based in New Delhi, raised Rs 13.5 crore in seed funding led by Asian Paints co-promoter Jalaj Dani. "We used the additional funds to accelerate our expansion plans and scale up manufacturing. We have also created micro-category drones for surveillance and logistics delivery," EndureAir Systems co-founder Rama Krishna told Moneycontrol.

In 2023, the startup intends to develop products capable of transporting payloads of 40 to 50 kilogrammes over distances of 80 to 100 kilometres. "At the same time, work is being done to expand our capabilities to carry 20 to 50kg payloads and to carry out several long-duration stealth operations," Krishna said.

In addition to receiving private funding, a drone startup has also entered public markets. Recently, DroneAcharya Aerial Solutions became the first Indian drone startup to go public, and their SME IPO was 262 times oversubscribed.

What lies in store for 2023

Need for clear import policies: "Today, both enterprises and the government are realizing the economic and social opportunities and sustainability that UAVs (unmanned aerial vehicles) can offer. The faster adoption of UAVs is therefore critical to realise the potential of this technology," Ankit Kumar, CEO of Skye Air Mobility, told Moneycontrol.

"One of the important aspects for faster adoption of this technology is that volumes are the need of the hour to bring down the costs. Therefore, the government should lay down clear export and import policies which are in favour of the sector to keep with the momentum and tap on global opportunities," Kumar added.

Workforce: Earlier this year, Civil Aviation Minister Jyotiraditya Scindia stated that India will require 1 lakh drone pilots in the future. Moneycontrol spoke with several startups that highlighted the need for such a workforce in the sector. "There is a pressing need for a skilled workforce at the present time, thus this should be the primary emphasis of businesses in the sector," Srivastava of DroneAcharya said.

"More funding for drone pilots' training and skill-building programs should be allocated in the upcoming budget, along with increased government support," Kumar of Skye Air said.

Boosting indigenous production: "The Government has taken few measures to promote make-in-India drones but till date we are not manufacturing 100% indigenous drone technology as most of the drone components are imported. To solve major import issues and reduce the cost of part components, the government can induce the setting up of manufacturing industries for drone components like batteries," Krishna of Endure Air said.

Moneycontrol has reached out to the Drone Federation of India for comments on the outlook for the industry for the year ahead and the article will be updated when a response is received.

Aihik Sur covers tech policy, drones, space tech among other beats at Moneycontrol