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Interview| India’s drone market can grow to Rs 50,000 crore in 5 years, says Drone Federation of India chief Smit Shah

India replaced drone rules that were considered restrictive with a more liberalised set of norms last month, noting the potential of the country becoming a global drone hub by 2030.

September 01, 2021 / 07:40 PM IST

India’s liberalised Drone Rules, notified on August 26, are seen as a major step in promoting the use of drones across various segments. However, quick implementation of the new rules and promoting their use is critical to developing the market in India, Smit Shah, director of the Drone Federation of India, told Moneycontrol in an interview.

Shah estimates the Indian drone market has the potential to grow to Rs 50,000 crore ($6.8 billion) or more in five years. The new norms are also in line with policies followed globally, he said. Edited excerpts:

 Will the government’s new Drone Rules push up commercial usage of drones in India? Where is it currently? Which sectors will adopt the commercial use of drones the earliest?

So, currently, drones are being used for aerial cinematography, land surveys, agriculture, construction progress monitoring, and roads, highways and railways.

The idea with the new rules is actually not which sectors will open up but the entire industry opening up because the set of rules that existed before this current policy did not allow for the commercial use of drones.

All drone operations before the new policy were non-compliant, which is why this policy is very important and now we will have drone businesses and drone operations legally conducted…

There’s not one sector where drones will not be used – right from land record projects to various other domains like mining, telecom, disaster management, oil and gas.

How do the new Drone Rules compare with international regulations? What more is needed to push the commercial use of drones?

The government has actually come up with a policy that is at par with international standards… when compared with the policies in place in the US, European countries or Australia.

It’s safe to say that from a legislation perspective, we are at par with international countries. Now, the biggest challenge will be to operationalise this and kickstart activities.

Under the new drone policy, the government has put in some requirements on the Digital Sky platform for the use of drones. So those things need to be operationalised – everything else looks good.

Anything in the new rules you are not pleased with?

As an industry representative, I would say there’s a lot more work that needs to be done…. in implementation of these rules and promotion of drones and creating market opportunities.

But from a regulation, legislation perspective, there is not something we’re particularly unhappy with. I think the drone industry in India would prefer some stability of policy… until businesses are established and able to generate some revenue.

What is the level of localisation of drone manufacturing and how long will it be before we see drones being made in India?

Drones as a finished product are being designed and assembled in India. Some of the specific components actually come from the US, European countries as well as China.

The challenge will not be about the design or assembly of drones, but it will be about component manufacturing, where India is lagging right now. A number of components used to make drones like batteries, motors and propellers are being imported due to lack of manufacturing facilities in India.

India as a country has been a bit slow in terms of the manufacturing ecosystem. With the new policy now announced, there is an opportunity to manufacture drones and even subcomponents with very particular needs.

How long before we see localisation at the ground level?

That has already started. There are companies that are trying to build motors, assemble battery packs and engineer propellers in India. There’s no definite number to say when we will reach 100 percent localisation.

The government had come out with a policy back in March, which was deemed unfriendly. Can you give us some sense of the lobbying that went into making the rules friendlier?

The rules that were released in March 2021 were from a perspective of licensing and control. The idea of regulating the industry through extreme licensing cannot work because you’re putting in the burden of compliance.

The rules published in March 2021 had the following problems:

  1. Excessive licensing and permissions were required. There were more than 10 permissions and licences required for research and development, 12 of them required for manufacturing, and many more for importing and operating drones. It was very hard for companies to start a simple drone business.

  2. There were some unimplementable equipment and technical requirements, which were mandated from day one. And the rules launched in March 2021 had severe fines, cognizable offences, which essentially demoralise the entire industry and do not incentivise anyone to take a risk.

After those rules were announced, the industry, academia and other stakeholders made written representations and gave feedback to the government and they took that into consideration while making the new rules.

What’s the level of drone usage in farming in India, given that in the west drones are used to artificially create rain on arid land?

It’s very nascent. Drones in agriculture can be used on two fronts – agriculture survey and monitoring and the other is agriculture spraying. In both segments, the use of drones in India is very small at the moment, but it’s expected that agriculture could be one of the biggest use-cases for drones in India.

Globally, the cost of operating drones for companies is comparable with or slightly higher than the cost of labour. In India, since the cost of labour is so low, will companies adopt drones for deliveries and air taxis?

Air taxis, yes, because typically, from a cost perspective, train travel and flying are still quite different. People who prefer flights looking for speed or to save time, overlooking the cheapest mode of travel. So, I would say from the air taxi perspective, the cost should not be an issue.

But for drone delivery, yes, there are some concerns over economic feasibility. The sectors best suited for drone deliveries would be where the impact is higher, which is delivery of lifesaving drugs and even vaccines in rural areas where the healthcare supply chain is not effective and cold-chain storage is not possible.

Those would be the most effective use-cases and once the technology matures and the cost of operations comes down, we will move from a rural healthcare focus to urban delivery applications as well.

How many people in India are trained to fly drones that are not in the line of sight? How do you expect this number to grow in the next two years?

No one yet because the government is still conducting experiments on beyond visual line of sight. The industry is coming together to create industry-driven standards on how to train people to operate drones beyond visual line of sight. This technology is new so it is required that the industry creates standards and safety procedures, which we are currently working on.

How does the Indian industry plan to address drones used as weapons?

The best way to answer this question is through an example. Economic benefits from the automobile industry outweigh the rare instances of a car being used as a bombing instrument. The same is true of the drone industry. Since the technology is quite new, it may seem like a threat and as we start analysing the threat and we conduct more research into the subject, easy-to-deploy technology will emerge to identify and counter the threats from drones.

The only solution to rogue drones would be to deploy countermeasures or counter-drone equipment. There is no other way to stop someone from assembling a drone, strapping in explosives and flying it in an area because you can’t control how people use technology, you can only build up defences.

How effective is the counter-drone technology available in India?

There are a few companies that make counter-drone technologies in India. The Defence Research and Development Organisation has created a counter-drone unit. There are some companies that have created indigenous counter-drone technologies.

We have a very sound capability of handling all existing threats... The only requirement is to actually give orders, deploy the systems and deploy them incrementally because the key difference between any other threat and this study is that this threat is new and it will continuously evolve.

What is the size of India’s drone market? How do you expect it to grow?

Rough estimates suggest that in five years, it will be Rs 50,000 crore. But this is a very rough estimate. Depending on how the policy enables the use of drones and how quickly companies use this technology, the market may grow even more. The current size of the market is difficult to estimate because this is the first time that the policy has been legalised.
Yaruqhullah Khan
first published: Sep 1, 2021 07:40 pm