Forbes India – Technology: 5 Obstacles India Must Overcome to Become a Global Drone Hub

Workers test a CSIR-NAL octocopter drone at the Wings India 2022 Airshow held at Begumpet Airport in Hyderabad, India on Thursday, March 24, 2022. Image: Dhiraj Singh/Bloomberg via Getty Images

India aims to become the global drone hub by 2030. Prime Minister Narendra Modi and Union Civil Aviation Minister Jyotiraditya Scindia have remarked on this vision on several occasions. The size of the global drone market is expected to grow exponentially in the coming years (see figure 1). The Indian government expects the annual revenue of the Indian drone manufacturing sector to exceed Rs 900 crore and the drone service sector to exceed Rs 30,000 crore in the next three years. Market development is expected to generate more than 5 lakh jobs. We highlight some of the potential barriers and suggest initiatives that can help government and industry achieve the vision.

The government, with social protection as a priority, is urging industry to focus primarily on agriculture, military and healthcare applications. Spraying nano urea, transporting Covid-19 vaccines, rural prospecting, etc. are a few recent drone operations that have followed and demonstrated this vision of the Indian government.

Travel so far

1. Drone Rules 2021

A new set of liberalized drone rules was released as “Drone Rules 2021” in August 2021 after incorporating suggestions from different stakeholders. The main highlights of the rules are: reducing the number of forms to be completed to operate drones from 25 to 5, reducing the types of fees collected from the operator from 72 to 4, reducing fee rates, etc. In short, the government has greatly simplified official procedures; thus reducing the time spent on paper work for registration and operations.

2.DigitalSky Website

A map of the airspace has been published by the government on the “DigitalSky” site. The map divides Indian airspace into green, yellow and red categories. The green zones, covering the majority of the geographical territory, are free flight zones. This eliminates the requirement to obtain operational approval from local authorities prior to drone operations. The DigitalSky website also acts as a one-stop portal to complete the five forms under the 2021 Drone Rules for the respective approvals.

Figure 1: Size of the drone market worldwide Source: Statista

3. Production Linked Incentive Program (PLI)

The government has allocated Rs 120 crores to the PLI program to encourage the manufacturing of drones and drone components. The incentive will be provided at a fixed rate of 20% of value added for the next three years. The government has granted several special flexibilities to the PLI scheme for the drone industry compared to the PLI scheme for other industries.

4. Ban drone imports for commercial purposes

According to the latest notification from the General Directorate of Foreign Trade (DGFT), the import of drones has been banned with exceptions provided for R&D, defense and security purposes. This will help Indian drone manufacturers to seize the huge potential of the domestic market. Importing drone components is free and justified considering the nascent stage of the drone component industry.

5. Removal of drone pilot license requirement

Now, a remote pilot “certificate” issued by a DGCA approved drone school through the one-stop-shop platform DigitalSky is enough to operate a drone in India, and no remote pilot certificate is required to operate a drone up to 2 kg for non-commercial purposes. purposes.

Potential obstacles: what more needs to be done?

1. Ease of import

Most drone components are still imported. The process of importing certain components, especially batteries, directly from the countries of origin (mainly China) is cumbersome due to the complexity of approvals, authorizations and order limits. Startups mainly order them through third parties, which increases the cost of components. Delivery delays further compound these problems. The recent notification from the DGFT on the import of drone components should solve the main import problems, but this has not yet been achieved.

2. Developing the drone and component manufacturing ecosystem

Any development of a manufacturing ecosystem requires significant investment and therefore requires strong initial encouragement. While government funding and support (easing of taxes, infrastructure costs, etc.) should accelerate growth, the role of industry institutions will also be essential. For example, component manufacturing companies may need support from drone manufacturers in the development stage. Component manufacturing SMEs with funding challenges can also be supported by technology hubs with shared facilities.

3. Provide security

On the industry side, technological advancements should be there to support localization and provide security. Drone manufacturers should provide drone redundancy. Motor or battery failure should not lead to a free fall in an ideal case. Advanced algorithms, autopilots and parachutes/airbags for drones must be developed and implemented to ensure safety even in the event of system failure.

4. Insurance

Currently, drone insurance requires a lot of paperwork. For custom drones, which is the case with most Indian startups, the process of obtaining insurance is very cumbersome. The price of insurance is also high, which reduces the profit margin. A simpler and more affordable insurance option is needed to ensure that every drone is insured.

5. Skills Development: Drone Pilots

The DGCA, through the Indian Institute of Drones (IID) and approved drone schools, provides pilot training and certification. Although the government facilitates this, there is a need for systematic capacity building to deal with the shortage. In addition, close monitoring of these certification processes is required to ensure the quality of pilots. The lack of a sufficient supply of quality pilots forces operators to recruit and train pilots internally. This leads to additional expense, especially when service sites are dispersed. If the supply of trained and certified drone pilots can meet demand, operators can hire pilots as needed at job sites. This can reduce the cost of service for drone operators, who can then turn it into a lucrative price for their buyers.

These are few initiatives that can accelerate the growth of the drone industry in India. With the current approach to the development of the drone industry, we hope that India’s presence will soon be felt in the global market.

Teacher. Nishant Kumar Verma, Professor in the field of Production and Operations Management ( at IIM Bangalore

Shiril Saju, PhD student, POM area at IIM Bangalore.

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[This article has been published with permission from IIM Bangalore. Views expressed are personal.]

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