The Indian government is now aggresively eyeing the drone industry in a big way. After giving a fresh lease of life to the drone industry with the new, liberalised regulations with the Drone Rules 2021 and approving PLI scheme for drones and drone components, the government has now imposed a ban on import of drones in the country. Along with giving the much-needed boost to drone manufacturing in India, the government is also helping Indian drone manufacturers with made-in-India exports.

Nagendran Kandasamy, Founder & CEO, Throttle Aerospace Systems Pvt Ltd told Business Today, “The new drone import policy witnesses the government’s focus on making India a global drone hub by 2030. As per the new policy, import of drones from foreign OEM is banned to promote domestic manufacturers. There were few troublesome experiences while importing drone parts and now this also come to limelight.”

Over the last year, the government has taken some serious initiatives to correct a lopsided market. What gave the sector wings is the government releasing a set of liberal regulations in August that made it simpler to own and operate drones. Barely a month later, the government approved a three-year production-linked incentive (PLI) scheme worth Rs 120 crore, which is double the combined turnover of all domestic drone manufacturers, in FY21.

“With the roll-out of the Drone Rules 2021 and now a huge boost to drone manufacturing through #PLIforDrones, the journey towards becoming a global drone hub by 2030 has begun,” tweeted Jyotiraditya M. Scindia, Union Minister for Civil Aviation. The government hopes the PLI scheme will attract investments worth over Rs 5,000 crore in three years.

In the earlier policy, Nano category (less than or equal to 250 grams) and operating below 50ft/15 meters above the ground level required Equipment Type Approval from WPC Wing, DoT for operating in de-licenses frequency bands, it did not require import clearance from DCGA or import license from the Directorate General of Foreign Trade (DGFT). Imports of Unmanned Aircraft System (UAS)/Unmanned Aerial Vehicle (UAVs) -- or remotely piloted aircraft drone -- were in ‘restricted’ category and required prior clearance of the Directorate General of Civil Aviation (DGCA) and import licence from DGFT.

The new revised policy prohibits imports of completely built up (CBU), Semi-knocked down (SKD) or completely-knocked-down (CKD) drones in India with a few exceptions, which includes import of drones for defence & security purposes from subject to import authorisation issued by DGFT in consultation with concerned line ministers. The new policy also states import of drone components shall be free. Earlier, there was no clear notification that drone parts can be imported, as drones were restricted product, and the manufacturers were finding a tough time.

As the new liberalised policy will see increased adoption of drones across sectors, including agriculture, infrastructure, amongst others, there is a huge potential in exporting made in India drones as well.

“The government has not only announced a path-breaking drone import policy but it is also ready to extended support to manufacturers aiming towards export. For instance, if any manufacturer finds it difficult to get EUC from the importing country, our government is ready to help liaise with the foreign country and get the required EUC & NOC for locally manufactured drones,” added Nagendran Kandasamy.

The domestic drone manufacturers are applauding the government’s move stating it to be a move that can promote drone manufacturing within the country as the ban on import of drones will increase their demand in the country. However, 90 per cent of the drones used in India are imported and this decision might disrupt the industry temporarily.

Research firm, Research and Markets estimates that India’s UAV market will be worth $1.81 billion (Rs 13,575 crore) by FY26. The Drone Federation of India has a more bullish estimate: Rs 50,000 crore in the next five years.

“While agriculture, real estate, homeland security and defence will be the few areas that will be the biggest drivers for the industry, strategic defence procurements are not part of this estimate. That said, if the potential of drone delivery and drone taxis is unlocked quickly, the market will expand 10X,” said Smit Shah, Director of Partnerships at the Drone Federation of India.

Until last year, homeland security accounted for nearly 70 per cent of the Indian market, according to industry sources. The rest was allowed for civil use only after exceptions by the DGCA, India’s civil aviation regulator. Outside of the defence sector, drones are mostly used in agriculture for crop dusting and monitoring crop health, and in the energy sector to oversee hazardous operations or to monitor oil pipelines.

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