MARKET ASSESSMENT

OF DRONES
ECOSYSTEM IN INDIA
FINAL REPORT
MARCH 2023

1
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2
CONTENTS

01 Global Trends for Evolving Drone Market

02 Market Trends For Indian Drone Ecosystem

03 Policy Trends in India Supporting the Evolving Drone Market

04 Industry Trends and Value Chain Assessment

05 PESTLE Analysis on the Drone Ecosystem in India

06 Conclusion

3
 1 GLOBAL TRENDS FOR EVOLVING
DRONE MARKET

Previous Chapter
Contents Next Chapter
4
INTRODUCTION OF A NEW TECHNOLOGY - DRONES

According to The Drone Rules 2021, a drone is defined as:

“an aircraft that can operate autonomously or, can be operated remotely without a pilot on board”

Weight (including
payload) Wing Type Power Source Range Size (Diameter)

• Nano (less than or equal • Single Rotor • Battery-powered • Very close-range (less • Very small drones (less
to 0.25kg) • Fixed Wing • Gasoline-powered than 5 km) than 51mm)
• Mirco (0.25-2kg) • Multi-Rotor • Solar-powered • Close-range (5-50km) • Small drones (76-
• Small (2-25kg) • Short-range (50-150km) 152mm)
• Fixed-Wing Hybrid • Hydrogen fuel cell
• Medium (25-150kg) VTOL powered • Mid-range (150-644km) • Medium drones (150-
640mm)
• Large (more than 150kg) • Long-range (more than
644km) • Large drones (more than
640mm)

As per Drone Rules 2021

Source: The Drone Rules, 2021, Ministry of Civil Aviation, New Delhi, the 25th August, 2021

5
GLOBAL SCENARIO OF COMMERCIAL DRONE MARKET
In the past few years, drone technology has experienced an unprecedented rise in popularity across the globe.

Global Potential Forecast for Commercial Drone Market

CAGR: 28.5%
60

50 47.38

40
USD Billion

30

20

10 6.51

0
2021 2022 2024 2026 2028 2029

The AI-enabled completely autonomous drone market is expected to grow faster than semi-autonomous and remote-controlled
drones since they can fly beyond visual line of sight (BVLOS).
Source: Strategic Market Research, Grand View Research
6
PRESENT GLOBAL SCENARIO OF COMMERCIAL DRONE MARKET
Market Outlook based on Products (2021)
Commercial Drone Market – By Regions
(2021)
Hybrid, 6.51%
Rotary Blade,
Europe, 22% 80.12%
APAC, 31% Fixed-wing,
13.37%

According to product prognosis, rotary blade sector kept top market position
with 80.12% revenue share in 2021.
North America,
40% LAMEA, 7% Commercial Drone Market – By Weight

25 Kg - 150 Kg

With 40.07% of the market share in 2021, North America dominated 2 Kg - 25 Kg

the regional market by a wide margin.
<2Kg

0% 10% 20% 30% 40% 50% 60%

Source: Strategic Market Research, Grand View Research
7
PRESENT GLOBAL SCENARIO OF COMMERCIAL DRONE MARKET
Market Outlook based on Applications (2021) Market Outlook based on End Users (2021)
Others*, 4% Mapping & Media & Entertainment
Surveying, 15%
Real Estate & Construction
Energy
Filming & Security & Law Enforcement
Photography, 32%
Precision Agriculture
Agriculture, 20%
Others
Delivery & Logistics

0% 5% 10% 15% 20% 25% 30%

Surveillance & Inspection &
Monitoring, 13%
With 29.28% end-user market share in 2021, the media and
Maintenance, 16%
entertainment sector achieved its highest market position.

With a 32.35% market share in 2021, the filmmaking and photography

application dominated all others by application.
* Includes entertainment, disaster management, logistics & transportation,
research & development, relief & rescue operations, and construction

Source: Strategic Market Research, Grand View Research

8
 2 MARKET TRENDS FOR INDIAN DRONE
ECOSYSTEM

Previous Chapter
Contents Next Chapter
9
BOOMING DRONE MARKET POTENTIAL IN INDIA
Indian Drone Market Potential Forecast (in INR Crores)
and Distribution across End-Use Applications Growth Drivers

CAGR: 35%
• Favourable governmental policies and regulations
(such as Drone Rules 2021, Drone Import Policy
2022 and Production Linked Incentive Scheme)
CAGR: 80% 295,000
• Rising demand from various end-use applications
(especially agriculture and logistics)

• Increasing investments and number of start-ups in

81,600 the drone manufacturing ecosystem

2,900

Upto 2020 2025

2025Forecast
Forecast 2030
2030Forecast
Forecast
Growth Inhibitors

Defense (Army, Navy and Air Force) 25% 17%

• India’s underdeveloped drone manufacturing capabilities in
Homeland Security (State Police & Paramilitary Forces) the form of R&D centers and testing sites

Commercial (Retail, Infrastructure & Agriculture) INR 81,600 Crs. 16% INR 2,95,000 Crs. 34% • Less sophisticated technical know-how and skillset (when
5% compared to established markets such as the US and
Exports 47% Japan) to support design- and security-related elements
Counter-UAS 16%
8%
7% 25%
` Source: FICCI
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 KEY TECHNOLOGY TRENDS
Drone solutions are becoming increasingly popular and expanding their capabilities thanks to several significant technology advancements.
Manufacturing Trends

Alternative Power
Application Trends
Sources

Edge and Fog Extended Flight

Computing Time Range

Integration with Superior Positioning

other technologies and Navigation

Autonomous Drones Hybrid Drones

Enhanced Payload
11
KEY TECHNOLOGY TRENDS
Alternative Power Sources

Drone manufacturers are exploring alternatives to China has successfully tested its first solar-powered
conventional battery technology, such as UAV, known as the Qimingxing-50. This UAV can fly
hydrogen cells, gasoline-powered systems, solar for months, even act as a satellite if necessary, and has
batteries, gas-electric hybrid systems, and laser successfully completed its inaugural flight. It has a
systems, because of the rising demand for longer wingspan of 50 m and is a high-altitude long-endurance
flight times and more carrying capacity. drone.

Extended Flight Time Range

Longer flight durations for drones are being With a maximum flight time of 42 hours, the
developed by manufacturers and researchers, unmanned MQ-C Gray Eagle Extended Range is
enabling them to hover for longer periods of time. the longest-flying military drone. It is employed
For applications like long-range surveillance and for long-duration surveillance and target acquisition,
package delivery, this is especially crucial. and its maximum takeoff weight is 4,200 lbs. The
Gray Eagle's GTOW is 3,600 pounds with a 160HP
diesel engine, while the GE-Max ER's Gross
Takeoff Weight (MGTOW) is 4,200 pounds and has
a high-performance 180HP diesel engine.

Source: China’s First Solar UAV, Qimingxing-50, Gray Eagle Extended Range
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KEY TECHNOLOGY TRENDS
The Zephyr S drone from Airbus is the largest,
Superior Positioning And Navigation lightest, and most durable unmanned aircraft
to ever fly, and its success might lead to new
With the capacity to fly in hazardous locations and hold capabilities for marine surveillance and GPS-like
exact positions even when exposed to unfavorable location. It weighs 150 pounds and flies at 80,000
conditions like strong winds, drones are getting more feet, distant from commercial traffic and
sophisticated in terms of their navigation and positioning unaffected by weather changes. It can fly at a
skills. graceful 30 knots for weeks because of its 80-foot
wingspan and solar-cell power.

Hybrid Drones The 'Vertiplane-X3' was unveiled by TechEagle, a private start-up firm
that specializes in drone-based logistics and was marketed as the
Hybrid drones, which can fly horizontally fastest hybrid e-VTOL (vertical takeoff and landing) indigenous
like an aeroplane and take off and land unmanned aerial vehicle in the world. The Vertiplane-X3 can go up to
vertically like a helicopter, are currently 120 km/h while carrying a 3 kg load across rough terrain at 4500 meters
being developed. These drones have the above sea level. This H-UAV combines the speed and aerodynamics of
potential to be more effective and a fixed-wing aircraft with the ability to land and take off from a small (5
maneuverable than conventional fixed- m2) area of ground.
wing drones.

Source: The Zephyr S drone, The Vertiplane-X3

13
 KEY TECHNOLOGY TRENDS

Enhanced Payload The Rhaegal is a new type of vertical takeoff and

vertical landing (VTOL) regional freight UAV that
promises high efficiency, all-weather operation. With
In order to carry greater loads and do a cruising speed of 370 kph, it can transport a VTOL
a wider variety of activities, drones payload of up to 2,455 kg across 1850 km. The Rhaegal
are being built to carry larger is a cutting-edge, adaptable, and effective air cargo
payloads. This is crucial for industries solution since the cargo bay is readily accessed from
like construction and agriculture, the nose and can transport LD-1, LD-2, or LD-3 cargo
where drones can deliver equipment containers or bulk goods utilizing a convertible roller
and supplies to inaccessible floor.
locations.

Now, the technology is still in the

Edge and Fog Computing research and development stage
for drones.
Fog computing allows data to be gathered to be analyzed inside the drone
before interacting with the main point of control. Drone operators will be able to
minimize latency and the amount of data that needs to be transmitted from the
drone to the controlling application by using fog computing.

Source: The Rhaegal

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KEY TECHNOLOGY TRENDS
Exyn Technologies rates its current degree of drone
Autonomous Drones
Alternative Power sources
autonomy, which it calls autonomy level 4A, as the highest
ever. Although it falls two steps short of complete autonomy,
The autonomy of drones, which can fly and carry this does allow for advanced transport, distribution, security,
out tasks without direct human input, is rising. inspection, and research duties as well as brand-new
Artificial intelligence (AI) and machine learning cooperative modes with other drones and ground-based
advancements have made this feasible by robots. Without a pilot in the loop, Exyn's LiDAR drones
enabling drones to make wise judgements can map and explore intricate subterranean mines on
based on information from sensors and other their own.
onboard systems.

Integration with other technologies First responders are assisted in

Hybrid Drones their rescue operations by
Firefighter Drones, which are
In order to create new capabilities and applications, drones are being
dispatched to fire spots as scouts
merged with other technologies like AI and machine learning. Drone
and use cameras with thermal
manufacturers are also integrating AR functionality in order to improve
imaging technology.
user experience, increase the effectiveness of drone technology
applications and offer better anti-collision protection.

Source: Exyn Technologies Autonomous Drone

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 VARIOUS ADVANTAGES DRIVING WIDESPREAD APPLICATIONS
Various advantages are offered by the drones over various other technologies across sectors. These advantages are supporting
widespread applications of the drones globally with the global industries striving to incorporate its use cases within their strategy.

Cost Reduction Drones often provide a convenient and affordable way to acquire aerial photos with high-quality geospatial data.
E.g.: For inspections, a drone is less expensive to purchase, and maintain than an aero plane

Drones can be programmed and accurately steered to specified areas since their software integrates GPS.
Precision and E.g.: Precision Agriculture - spraying pesticides, identifying weeds, monitoring crop health, crop damage, crop
Accuracy evaluation, field soil analysis, and monitoring irrigation.

Drones can capture amazing aerial photographs, and aerial films, and gather huge amounts of precise data thanks to
Quality their high-resolution cameras equipped with top-notch sensors.
Improvement E.g.: The collected data from drones can be converted into detailed 3D maps and 3D models.

Flexibility and Drones have a wider range of motion, fly lower in all directions, and are adept at navigating. Drone-control technology
Agility enables users to swiftly deploy and control drones even with only a very basic understanding of technology.
E.g.: Midair Reconfigurable Quadcopter
Easy Drones make it simple to collect effective data from difficult-to-reach regions. It is the best substitute for overcoming the
Accessibility drawbacks of conventional techniques in terms of worker safety.
E.g.: Drones can be used in risky circumstances like radiation monitoring and high-voltage line inspection.

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KEY APPLICATIONS AND USE CASES ACROSS SECTORS
Use Cases
DEFENSE
1. The Indian start-up Sagar Defense Engineering has created "Varuna,"
 Border Security & Surveillance
India's first people-carrying platform, a VTOL UAV without a pilot. One
 Strikes & Combats
person can fit inside the drone at a time. It has been specially made for
 Threat Assessment
 Swarm attack the Indian Navy which will be initially used for transferring materials.
 Counter drone 2. The Archer-NG armed drone has a 300 kg armament capacity, including
anti-tank guided missiles and smart anti-airfield weapons (SAAWs).

ENERGY & UTILITIES Use Case

 Monitoring & Maintenance Maharashtra State Electricity Transmission Company Limited

 Surveillance & Incidence Response has utilized drones for EHV Line Patrolling. These drones
 Transmission power patrolling include high-resolution cameras with normal vision, thermo-
 Powerplant & Transmission corridor mapping vision, and GPS capabilities. The drones, which are being
 Pipeline and other asset monitoring
used for a variety of duties including preventative
 Surveillance and incidence response
maintenance, have been providing swift and precise surveys of
 Construction monitoring
lines and substations.
 Assist in predictive maintenance
 Inspection of offshore platforms
Source: Varuna – India’s first people-carrying platform, Archer – NG , MSETCL - Drone Usage
17
KEY APPLICATIONS AND USE CASES ACROSS SECTORS

Use Case
MINING
 Monitoring and Inspection MCL, a subsidiary of Coal India, has implemented drone technology in coal
 Stockpile and Quarry mines for volume measurement, environmental monitoring, and
Management photogrammetric mapping of mines to digitalize the mining process. Through
 Hazard Identification the VIHANGAM portal, the technology allows for the real-time transmission
 Haulage road optimization of aerial footage of mining operations from mines to an online platform.

HOUSING AND URBAN AFFAIRS Use Case

 Monitoring and Inspection

On September 30, 2022, the Supreme Court ordered the Central
 Incident reporting
Government to employ drones to undertake geospatial mapping
 Planning/ Digital Elevation Model
of the whole city and digitize land records to prevent
 Land Mapping Surveys
encroachments and widespread residential property misuse.

Source: Vihangam, Mapping illegal constructions using drones

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KEY APPLICATIONS AND USE CASES ACROSS SECTORS
AGRICULTURE Use Case
 Soil & Crop Health Scans
 Irrigation and Aerial Seeding The Anna University-supported drone manufacturing business has
 Fertilizer & Pesticide Spraying created an Agrigator drone, the only certified petrol engine-based
 Plant size, and crop health monitoring hybrid drone that doesn't need its batteries changed frequently. The
 Farm output estimates drone has been developed by Dhaksha Unmanned Systems Pvt Ltd.
 Vegetation indices, plot statistics
 River erosion/restoration tracking
 Insurance claim surveys
 Agri data exchange for drones

Use Case

FOREST & WILDLIFE CONSERVATION

 Hazardous Activity Monitoring The government of Madhya Pradesh's Forest Department
 Pollution-level Assessment and Source Tracking intends to employ drones to monitor the eight wild cheetahs it
 Anti-poaching Monitoring obtained from Namibia at Kuno National Park.
 Migratory behaviors of wildlife
 Tree health monitoring
 Forest Mapping

Source: The Agrigator Drone, Drone monitoring by Forest Department

19
KEY APPLICATIONS AND USE CASES ACROSS SECTORS
HEALTHCARE & Use Case
DISASTER MANAGEMENT
 Essential & Healthcare Items Delivery The Arunachal Pradesh government launched "Medicine from the Sky,"
 Sample collection from remote or a drone-based healthcare network, on August 15, 2022, from Seppa to
epidemic/ pandemic affected areas
Chayang Tajo in the East Kameng district. On the basis of the project's
 Impact assessment during disasters
clear image of operational challenges, financial viability, and regulatory
 Transport medicines, food, and
essentials in disaster-affected areas concerns, the government will develop a policy and act to gradually
 Search and Rescue accept this developing technology.
 Patrolling in remote areas

Use Case
INFORMATION AND BROADCASTING
 Hazardous Activity Monitoring
When the country has been blocked off to outsiders and is
 Pollution-level Assessment and Source Tracking
under lockdown, remote-controlled UAVs have permitted
 Anti-poaching Monitoring
media organizations to film or take pictures of different
 Migratory behaviors of wildlife
parts of the lockdown and cover them.
 Tree health monitoring
 Forest Mapping

Source: Medicine from the Sky, UAVs for Monitoring

20
KEY APPLICATIONS AND USE CASES ACROSS SECTORS
Use Case
RAILWAYS
 Surveillance and Incidence Response In order to monitor its assets and guarantee passenger
 Visual Inspections and Maintenance safety, the Railways has purchased Ninja unmanned aerial
 Construction Monitoring drones with real-time tracking, video streaming, and
 Equipment Monitoring automatic failsafe mode.

Use Case
HIGHWAYS & WATERWAYS
1. NHAI has made the use of drones for monthly video recording of National
 Visual Inspections
Highway projects during all stages of development, construction, operation,
 Incident Response and maintenance mandatory in order to increase transparency and
 Construction monitoring uniformity.
 Dynamic monitoring utilizing
2. The Ministry of Road Transport and Highways unveiled Skye UTM, a
sensors for water quality
cutting-edge drone air traffic management system, with a capacity of
around 4,000 planes per hour and 96,000 flights per day. It combines
human aviation space with an unmanned aerial traffic control system that
operates in the cloud.

Source: Ninja UAVs, NHAI makes drone surveys mandatory, Skye UTM
21
 3 POLICY TRENDS IN INDIA SUPPORTING THE
EVOLVING DRONE MARKET

Previous Chapter
Contents Next Chapter
22
 CENTRAL POLICY AND REGULATORY FRAMEWORK
November 2022
Guidelines for PLI scheme for manufacturing of drone & drone components
Notified by the Ministry of Commerce and Industry
February 2022
Drone Import Policy January 2022
Notified by the Ministry of Commerce and Industry Certification Scheme for Unmanned Aircraft Systems
Drone (Amendment) Rules Notified by the Ministry of Civil Aviation
Issued by the Ministry of Civil Aviation
Second Tranche of Policy and Initiatives

October 2021 September 2021

National Unmanned Aircraft System Traffic Management Policy Framework Drone Airspace Map
Issued by the Ministry of Civil Aviation Published by the Ministry of Civil Aviation
PLI Scheme for manufacturing of drone & drone components
August 2021 Notified by the Ministry of Civil Aviation
Drone Rules
Issued by the Ministry of Civil Aviation
January 2019
Drone Ecosystem Policy Roadmap
August 2018 Issued by the Ministry of Civil Aviation
Civil Aviation Regulations 1.0
Issued by the Ministry of Civil Aviation
First Tranche of Policy and Initiatives

October 2014
Ban on commercial use of drones
Issued by the Director General of Civil Aviation

Source: Use of Drones (PIB, MoCA, 2015), A series of reform measures undertaken to promote India’s upcoming drone industry (PIB, MoCA, 2022)

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DYNAMICALLY CHANGING POLICY & REGULATORY LANDSCAPE
• The Government of India aims to capture this sunrise opportunity presented by the industry
and has set a vision to make India a ‘global drone hub’ by 2030.

• In this context, Indian drone ecosystem has observed enactment of various policies and
launching of several initiatives and schemes by the Government of India.

01 Liberalization 03
of ecosystem
Boosting
domestic
manufacturing
02
Encouraging
uptake of
applications

Source: Union Minister Jyotiraditya Scindia Launches NITI Aayog’s Experience Studio on Drones (PIB, NITI Aayog, 2022)

24
 LIBERALIZING DRONE ECOSYSTEM
• In August 2018, the drone ecosystem observed a complete overhaul with notification of Civil Aviation Regulations
(CAR) 1.0. The regulations enabled civil operations of drones of first-of-its-kind national unmanned traffic management
Drone (Amendment)

(UTM) platform, i.e., Digital Sky Platform. The platform will facilitate one-time registration of the drones, pilots, and
Rules, 2022

owners as well as implementing the “no permission, no takeoff” (NPNT) compliance of drones.
Policy Roadmap, for Unmanned Aircraft
Drone Ecosystem Certification Scheme

• To assist in the drafting of CAR 2.0, the MoCA released the Drone Ecosystem Policy Roadmap (DEPR) in January
Systems, 2022

2019. Some pivotal recommendations were proposed, such as setting up a drone directorate within the DGCA as well
as developing favorable infrastructure for beyond visual line of sight (BVLOS) operations like unmanned aircraft
system traffic management (UTM), drone corridors, and ports.
Rules, 2021

• Since August 2021, through the notification of Drone Rules, India’s regulatory landscape has begun to give room to the
Drone

industries to experiment and contribute meaningfully to the ecosystem. The Rules drastically changed the ecosystem by
reducing the number of permissions from 25 to 5 and types of fees from 72 to 4.
2019

• The Rules further added to the growth by laying down criteria for classification and categorization of drones,
Regulations 1.0, 2018

application and procedure for the type certificate, remote pilot license, and remote pilot training organization, as
Civil Aviation

well as the need for insurance and mandatory safety features.

• Continuous progress is being made with the notification of Certification Scheme for Unmanned Aircraft Systems in
January 2022 to streamline the process and timeline of receiving the drone type certificate with an aim to ensure a
minimum airworthiness standard as well as announcement of the Drone (Amendment) Rules in February 2022 to
remove the requirement of a remote pilot license.
Refer to Annexures: CAR1.0 (2018), DEPR (2019), Drone Rules 2021

25
 ENCOURAGING UPTAKE OF DRONE APPLICATIONS
• With the notification of CAR 1.0 (2018), the outright ban imposed was lifted that impacted the uptake of drone
applications for commercial use and, thus, provide the necessary boost to the emerging ecosystem.
Drone (Amendment)

• To be ready to cater to the growing market while preventing unauthorized flights and ensuring public safety, the CAR 1.0
Rules, 2022

System Traffic Management

National Unmanned Aircraft

Policy Framework, 2021

regulations laid out the implementation of “no permission, no takeoff” (NPNT) compliance through the Digital Sky
Platform. Under the compliance, any drone without a digital permit to fly will simply not be able to takeoff. The
regulations also defined and categorized the airspace into different zones (namely, red, yellow and green) with
different permission requirements as well as defining “No Drone” zones.
Drone Airspace

• The notification of Drone Rules 2021 further added to the cause and provided the necessary regulatory framework for
Map, 2021

commercial use of drones. They have increased the permissible payload to 500 kg and allowed the development of
drone corridors for cargo deliveries. The Rules have reduced formalities including forms, fees, permissions, and
licenses, which were further reduced by Drone (Amendment) Rules 2022.
Rules, 2021
Drone

• Up to 90% of Indian airspace has been opened for drone applications with airspace up to 400 feet being designated
Regulations 1.0, 2018

as green zone on the interactive drone airspace map published in September 2021. Furthermore, a revamped Digital
Civil Aviation

Sky platform was launched in January 2022, with digitalized forms, permissions, and updated information.
• To enable complex operations of drones and increase the overall safety in the airspace, the National UAS Traffic
Management (UTM) Policy Framework, published in October 2021, defined the architecture and mechanism for
traffic management of unmanned aircraft in Very Low Level (VLL) airspace up to 1000 feet above ground level. It further
laid down the UTM stakeholders’ services as well as guidelines for real-time identification, tracking and security.
Refer to Annexures: CAR1.0 (2018), Drone Rules 2021, Drone Airspace Map (2021)

26
 BOOSTING DOMESTIC MANUFACTURING
• In the last decade, the opening of the civil drone industry provides a golden opportunity for the expansion of the Indian

for manufacturing of drone

& drone components, 2022
Guidelines for PLI scheme drone manufacturing ecosystem and move towards increasing the share of indigenization in the overall supply chain.
• Follow-through of the liberalization of drone ecosystem via notification of Drone Rules 2021, the Government of India
introduced the Production Linked Incentive (PLI) Scheme for Manufacturing of Drone and Drone Components in
September 2021. The PLI Scheme is intended to catalyze the growth in the upcoming drone sector with indigenous
production.
Drone Import
Policy, 2022

• The Scheme allocates INR 120 Crores spread over a period of 3 financial years for drone and drone component
manufacturing, nearly doubling the combined turnover of FY 2020-21 of all domestic drone manufacturers. With
for Unmanned Aircraft
Certification Scheme

exceptional treatment provided to the drone industry, the Scheme provides a cascading estimated incentives on a
Systems, 2022

yearly basis for drone and a wide variety of its components as well as drone-related IT products.
• The Certification Scheme for Drones along with Drone Import Policy introduced in the months of January and
manufacturing of drone &
drone components, 2021

February 2022, respectively, aim to support the local ecosystem and provide the necessary boost for domestic
PLI Scheme for

manufacturing. While the Certification Scheme making it easier to obtain type certificate by drone manufacturers, the
Drone Import Policy restricts the import of foreign drones but frees up the import of drone components.
• For the effective operation and smooth implementation, the operational Guidelines for PLI Scheme were formulated and
notified in November 2022. The guidelines covered qualification & eligibility, application & online portal as well as
defined the Project Management Agency (PMA), Empowered Group of Secretaries (EGoS), & Competent Authority and
their roles in the approval mechanism for the PLI calculations and disbursement.
Refer to Annexures: PLI Scheme (2021), Guidelines for PLI Scheme (2022)

27
CLOSER LOOK TO MOMENTOUS PUSH IN FY 2022-23
6th December 2022
Union Minister Shri Anurag
6th July 2022
launched 1st Drone Skilling &
The provisional list of PLI Training Conference and flagged
beneficiaries prepared off Drone Yatra 2.0 in Chennai
earlier in April 2022 was
extended from the
10th to 31st March 2022 preliminary list of 14 to
23 beneficiaries
Applications from drone
and drone component
9th February 2022
manufacturers for PLI
26th January 2022 Drone import policy has scheme for drones and 29th November 2022
been notified to ban import drone components were
Digitalization of all five invited. 27th May 2022
of foreign drones and For the effective
application forms under freeing up the market for the operation and smooth
Drone Rules, 2021 and made import of drone components PM inaugurates India's implementation of the
available on the DigitalSky biggest Drone Festival - PLI scheme, Civil
Platform 11th February 2022 Bharat Drone Mahotsav Aviation Ministry has
2022, which attracted formulated and notified
22nd January 2022 Drone (Amendment) Rules, 2022 over 70 drone exhibitors the operational
26th January 2022 has been notified to abolish the and 10,000 visitors. The guidelines covering
Monetary grant program Drone certification scheme requirement of a drone pilot event witnessed open-air various aspects of
for purchase of agricultural has been notified making it license and notify remote pilot drone demonstrations. implementation
drones was announced by easier to obtain type certificate issued by a DGCA-
the Union Agriculture certificate by drone authorized drone school to be
Ministry manufacturers. adequate for operating drones.

Source: Samvaad with Scindia: Minister of Civil Aviation Interacted with farmers on benefits and challenges of Kisan Drones, PM inaugurates India's biggest Drone Festival - Bharat Drone Mahotsav 2022, Ministry of Civil Aviation releases the
second provisional list of 23 beneficiaries under the PLI Scheme for drones and drone components, Ministry of Civil Aviation has proactively engaged with various Union Ministries and State/UT Governments across the country to promote drone
applications, India will become a hub of drone technology, Union Minister for Information & Broadcasting Shri. Anurag Singh Thakur, Ministry of Civil Aviation issues guidelines for PLI incentive scheme to support indigenous drone industry

28
 INITIATIVES BY GOI TO PROMOTE DRONE APPLICATIONS
Strengthening Defense Sector2
Fight against COVID-191
• India’s DRDO, under its Drone Program, aims to develop a
• Deliver COVID-19 vaccines with pilot project in Manipur, domestic arsenal of drones; some of them being DRDO
Nagaland and Andamans & Nicobar Lakshya, DRDO Nishant, DRDO Rustom
• Surveillance of COVID-19 containment zones to ensure • Army launched ‘Him Drone-a-thon’ programme, along with
compliance of lockdown guidelines; demonstrated by Drone Federation of India to catalyze ecosystem
Chandigarh Police

Promotion via “Drone Shakti” & Drone Melas5

SVAMITVA Scheme3 • 2022-23 Budget outlines startups to promote and
• Provide ‘Record of Rights’ to village household owners facilitate ‘Drone Shakti’ through varied applications and
possessing houses in inhabited areas for Drone-As-A-Service (DrAAS)
• Provide an integrated property validation solution for • PM inaugurated India's biggest drone festival, i.e.,
rural India; Survey of India to use drones for mapping Bharat Drone Mahotsav 2022
of inhabited areas of villages
Kisan Drones and Sub-Mission on
Agricultural Mechanization6
Surveys of Infrastructure Projects4
• PM Launched Kisan Drones at 100 places
• Indian Railways (IR) introduced drones for security across the country
surveillance; Mumbai division procured 2 drones for the
• SOPs to provide instructions for effective &
same
safe drone operations for pesticide and
• Coal India Ltd. (CIL) introduced drones for real-time nutrient application
videography for surveying and mapping of mines
• Monetary grant to facilitate “kisan drones” in
• NHAI made mandatory use of drones for monthly video agriculture sector with funds for disbursement
recording of all projects during all stages and make amounting to INR 52.5 crores to ICAR and
comparative analysis videos INR 70.88 Crores to state governments

Source: 1: India deploys drones to deliver COVID-19 vaccines, Drone Based Surveillance System; 2: The growing market for drone technologies in India, Indian Army Launches ‘Him Drone-a-thon’; 3: SVAMITVA
Scheme; 4: Indian Railways introduces Drone based surveillance system for Railway Security, Innovative RPAS Inaugurated at MCL of Coal India Ltd, NHAI Makes Drone Survey Mandatory for All National Highways
Projects; 5: Summary of Union Budget 2022-23, PM inaugurates India's biggest Drone Festival - Bharat Drone Mahotsav 2022; 6: Kisan Drones, Use of Drones in Agriculture Sector
29
STATE POLICY AND REGULATORY FRAMEWORK
Drone Policy/ Guidelines/ Action Institutions Establishment
Plan Notified

• Various states have constituted dedicated

• Govt. of Himachal Pradesh, Gujarat, institutions for the promotion and adoption
Goa and West Bengal notified Drone of drone applications within the state. These
Policy/ Guidelines for their respective include Andhra Pradesh, Haryana, Tamil
states in 2022 Nadu, Uttarakhand, Tripura.

• Govt. of Arunachal Pradesh formulated • Apart from these institutions, IITs present across
Arunachal Pradesh Drone Framework states have dedicated research center and/or
and Action Plan Roadmap in 2022 incubation centers working to support the
startups in the ecosystem.

Initiatives Planned and/ or Undertaken

• While majority of the states do not have any specific policy in place, the state governments
have been working towards implementing various initiatives/ projects showcasing drone
applications.
• Among the sectors, agriculture and healthcare have witnessed the maximum number of
use cases with some applications in other sectors including city surveillance, defense and
security, land mapping, forest management, power sector as well as drone-based
monitoring, surveillance and delivery. Some states have also been actively working on
the skill development aspects to promote drone adoption.
Refer to Annexures: Policy and Regulations by States, Initiative Undertaken by States, Institutions Established by States
30
 4 INDUSTRY TRENDS AND VALUE CHAIN
ASSESSMENT

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Contents Next Chapter
31
DRONE VALUE-CHAIN IN INDIA

Aircraft Hardware Operations Services

Physical Navigation/
Components OEMs Operators Support Services Data Management
Infrastructure Traffic
Components and Assembler or Physical Systems designed to Professional Services supporting Software and
subcomponents manufacturer of infrastructure navigate airspace Service providers of the drone ecosystem analytics to digitize
used on drones drone for drone takeoff, drone the information
landing, and • Artificial • Pilot marketplace collected by drone
• Batteries • Consumer recharging intelligence • Photography • Repair services
• Payloads • Commercial • Route planning • Mapping • Consulting • Data
• Sensors • Landing pads • GPS devices • Inspections • Training processing
• Motors • Stations • Testing • Image
• Vertiports infrastructure processing
• Chargers software

Select Indian Players

Source: The Future Of Unmanned Aerial Systems Report, Secondary Research

32
DRONE COMPONENTS ARE MOSTLY IMPORTED
Most sensitive purchases and use cases related to drone components are still Select shortlisted companies by Government of India
being imported by the government and commercial agencies in India. under PLI incentives scheme for drone components

Import* (%)
• Absolute Composites (Airframe)
25%
Airframe • Adani-Elbit Advanced Systems India (Assembly)
(China, EU)
Sensor Payloads – DSLR, 75% • Adroitec Information Systems (Data Management)
LIDAR, Thermal, Zoom Lens (China, Taiwan, US, Japan, Israel) • Alpha Design Technologies (Assembly and
50% Communication)
GCS & Communication Device
(China, US, EU, Philippines) • Dynamake Engineering (Design)
75% • Imaginarium Rapid (Design)
Power Plants/ Battery/ Engine
(China, Taiwan, US, EU, Israel, Australia)
• SASMOS HET Technologies (CS : Control System)
75%
Servos • Servocontrols Aerospace India (Servos)
(China, Taiwan, US)
75% • Valdel Advanced Technologies (CS)
Electronic Speed Controls (China, Taiwan, US, EU) • ZMotion Autonomous Systems (CS)
75% • Zuppa Geo Navigation Technologies (Navigation)
Propellers
(China, Taiwan, US, EU)
Source: *FICCI Report

33
FOUR KEY COMPONENTS CONTRIBUTES TO 75% OF TOTAL COST

Motors
25
Top 2, motors & camera alone contribute to approximately 45% of the total
Camera payloads manufacturing cost
20

Communication
module 15 Top 4, which also includes communication module & batteries comprise a total
~75% of total manufacturing cost
Batteries
15

Propellers
10  More than 50% of the top 4 components are imported and not
manufactured locally in India
Navigation  These parts are imported mainly from China. The Indian government aims to
10
make India a drone manufacturing hub by 2030
Airframe  China poses a stiff competition to drone manufacturers of India because of the
5 price point advantage combined with limited demand in India (growing
eventually). These factors combined makes reaching economies of scale in
Total manufacturing a difficult task
100

Component cost in percentages

Source: FICCI Report
34
DATA MANAGEMENT CONSTITUTES ABOUT 65% OF TOTAL DRONE SERVICE COST

 Equipment cost which can be broadly classified as

Drone equipment
manufacturing, is only ~20% of the overall cost in application 12%

of drones
Battery
 The most significant cost is that for data management which 8%

accounts for more than 60% share of the overall cost

Maintenance
3%
 55% of the global investment in the drone sector is made
towards manufacturing side of the business, while it is Manpower
6%
evident that the data management is the most expensive and
Logistic
may require more focus pertaining to efficiency improvement Data management 6%
65%
 The service side of the drone application roughly constitute
~75% of the overall cost and is far more commercially
significant than providing the equipment. In future, digitization &
diverse application may lead to further increase in costs related
High level approximate cost break up in % across the value chain
to data management (cost data is generic, may vary for different use cases)

Source: FICCI Report

35
MOST OF THE DRONE PLAYERS IN INDIA FOCUS ON MANUFACTURING OR SERVICES,
ONLY A FEW PLAYERS OFFER INDIGENOUS DATA MANAGEMENT SERVICES
Some key players and their presence in the Indian market (Source: Secondary Research)
S.No. Name of the company Manufacturing / assembling Support services Data management
1 Iotechworld  × ×
2 General Aeronautics  × 
3 Droneacharya ×  
4 Drone Destination   
5 ideaForge   
6 TROPOGO ×  ×
7 ZUPPA  × ×
8 Datasol Innovative labs ×  ×
9 Marut Drones ×  ×
10 Dhaksha Unmanned System  × ×
11 Aarav Unmanned system   ×
12 AOTOM technology × × 
13 BharatRohan ×  
14 UrbanMatrix  × 
15 Vecros  × 
16 Garuda Aerospace  × ×
17 Optimized Electrotech ×  
18 Skylark Drones ×  ×
19 TechEagle Innovations  × ×
20 Paras Aerospace   ×
36
FRAMEWORK FOR INFRASTRUCTURE ASSESSMENT FOR VERTICAL TAKE-OFF AND
LANDING (VTOL)
eVTOLs require advanced Regulations plays and important
The assessment would evaluate communication systems to role in development of any new
the power supply, charging rates ensure safety and reliable technology and hence the
and the number of charging operations. The assessment assessment would evaluate the
stations required to suffice the would evaluate the existing existing framework and identify
current and future requirement. communications infrastructure the changes required to safe and

01 03 05
and identify the upgrades efficient operations
required

02 Airspace 04 Maintenance 06
Landing and management infrastructure
take-off sites Communication Regulatory
Charging infrastructure framework
infrastructure .

eVTOLs require dedicated Since eVTOLs operate in low Specialised maintenance

landing and take-off sites. The altitude airspace which requires facilities are required because of
assessment would identify new air space management. The the difference in technology from
suitable locations and evaluate assessment would evaluate the regular aircraft. The assessment
the feasibility in terms of safety, current airspace management would evaluate the current state
access and environmental impact and the identify the changes and future requirement to satisfy
required the increasing demand

Source: Our Analysis

37
INITIAL CHALLENGES PERCEIVED FOR VTOLS IN INDIA – INFRASTRUCTURE REMAINS
A KEY FOCUS AREA

Constrained airspace
Majority of airspace is already taken up by commercial and business aircrafts. Current air traffic control not handle
01 robust operations of VTOLs. Drones & VTOLs fly in low altitude areas in dense buildings making it further difficult to
ensure safe air navigation

Utilization & load factors

02 Commercial aircraft business model is successful if it operates in cost efficient manner because of
optimum utilization with load factors of their aircrafts, which remains a challenge in the case with VTOLs
Challenges for in the near future.
VTOLs in India
Landing sites & charging stations
Only developing the aircraft wont solve the problem, having proper landing spaces is an area where
03 companies are focussing on too. Pre-existing heliports would have to undergo transition to vertiports
which would have charging stations too.

Willingness to pay
04 In the initial period the price per trip is likely to remain higher than other modes of transport, the mass adoption in India
is only possible with affordable per trip fare

Source: Our Analysis

38
DESPITE CHALLENGES, SEVERAL PLAYERS IN INDIA HAVE MANAGED TO DEVELOP
SOME PROTOTYPES (VTOL)

Text here
The Indian start-up Sagar Defense Engineering has created "Varuna," the India's first people-carrying platform that is a drone
Use Case

without a pilot which can be classified as a VTOL. One person can fit inside the drone at a time. It has been specially made for
the Indian Navy which will be initially used for transferring materials. Varuna can be operated remotely and on predefined paths

Range – 25 km: Payload – 130 Kg; Endurance – 25 – 33 min

Abhiyaan _ENM800 is a VTOL two-seater air taxi version with all electric and hybrid propulsion system. This can be attached

Use Case
Text here with additional payloads for services such as paramedics, rescue mission, disaster management and cargo drop etc.

Cruise speed – 50 m/s: Operational altitude – 2000 m : Endurance – 3.3 hours for hybrid and 1 hour for electric

Text here
ideaForge has developed Netra V4 as a lightweight UAV that uses quadcopters to provide lift and control giving it a VTOL
Use Case

capabilities.

Range – 4-5 km: Maximum operational altitude – 400M ; Endurance – 40-60 min

Source: Secondary Research

39
DATA MANAGEMENT SERVICES FOCUS ON 5 MAJOR COMPONENTS

Drone Based Image Capturing

Data Transmission

Base Station

Data Analysis
Survey Area

Data Visualization
Data analysis, data visualization, data storage and management
forms the core of data management services which accounts for
65% of drone operating cost. Inspite of this, the software and Data Storage and Management
technology in terms of platforms are not readily available which
increases our dependency on foreign service providers .
Data Centers Data Optimization Reporting

Source: Secondary Research

40
DESPITE OF INDIA HAVING BEST OF IT CAPABILITIES, NUMBER OF SERVICE
PROVIDERS OPERATING IN THIS SEGMENT IS VERY LOW

Lack of Specialized Technology Infrastructure challenges

• Drone data management service ecosystem in • Air traffic management systems and reliable
India is still in nascent stage and there is communication networks are still being setup
shortage of specialized technology solutions. which poses as a challenge.
• Data centres with large capacity are required
• Lack of funding and limited R&D are the root
to store the huge amount of data that would
cause of this challenge. The same has been
be transmitting from the drone
expressed by the stakeholders.

• xx

Limited market size for now with an Gap in required and available skill
expected large growth in future • Data management in drone requires range of
• Limited operators owing to limited adoption of skills and this being a developing industry, the
drone ecosystem in India owing to the limited number of people available for such roles are
current market size very few. Companies must invest in training
and development of required skills in their
employees.

Source: Secondary Research

41
DRONE TESTING ENTAILS DEVELOPMENT OF SPECIFIC GREENFIELD FACILITIES

01 02 03 04
Avionics testing facility Indoor testing room Outdoor flight-testing Safety & compliance related issue
Avionics testing facility should Indoor testing facility should zone Integrated testing facility should enable the
be able to but not limited to be able to but not limited to For ensuring air worthiness of following testing:
following: the following: drones, it should be tested  Environmental Testing: Testing the
 Auto Pilot and Flight  Wind Tunnel Testing of under real operational mechanical stress in different climatic
Control System Aerodynamic Structures scenarios and hence outdoor conditions
testing facility should have the
 Ground Control Systems  Fatigue Evaluation  Mechanical Safety Testing: Testing
following to undertake the
 Power Plant  Dynamic and Endurance testing : against mechanical failures of
Testing of Rotors, Drives & components / equipment
 Electrical Power  Airstrip
Subsystems Controls  Wireless Testing: Testing for compliance
 Telemetry test equipment with the statutory codes and regulations
 Command and Control  Testing of Batteries
 Drone monitoring centre  Electrical Safety Testing: Testing of
Link  Simulation Testing
 Hangars electrical systems and the capability to
 Performance of Payloads
 Fire Stations function satisfactorily in its
electromagnetic environment

Source: Secondary Research

42
DRONE TESTING FACILITY IN INDIA
1 Current Infrastructure available at Drone testing
Prominent Drone Testing Sites in India sites in India
 Marut Drone Testing Site, Chitradurga – Outdoor testing and evaluation
facility setup specially for unmanned drones.
 Research and Development Facilities
 Challakere Drone Testing Site – Dedicated airspace for drone operations
along with testing facility and a control room.
 Aeronautical Test range by DRDO, Bengaluru – Integrated test center for  Wind tunnel and flight range for testing
DRDO’s cluster of aeronautical laboratories
 Hindustan Aeronautics Limited Drone testing site, Bengaluru – Dedicated
testing sites for Military drones  Access to high-speed network and connectivity

2
Challenges faced by Drone Testing Sites in India
 Dedicated testing facility for military drones
 Limited funding from the government and private investment
 Infrastructure supporting the drone testing sites are not available at all
sites  Dedicated Airspace for testing
 Lack of specialized skill required to build and operate a drone testing site
Source: Secondary Research
43
MEANWHILE, INFRASTRUCTURE OF DRONE TESTING SITES HAVE EVOLVED IN OTHER
DEVELOPED REGIONS SUCH AS USA AND CHINA

Indoor and outdoor testing areas - Testing sites in USA have dedicated Artificial intelligence systems - Access to high level artificial intelligent
indoor and outdoor testing area and even dedicated air corridors systems helps in development and testing of intelligent drone applications
such as object identification, autonomous flight and intelligent navigation
Data analytics systems - USA has focused on test range infrastructure, Indoor testing areas - Testing sites in China have specialized indoor
data collection and analysis as foundation of integrated testing testing areas which supports in development of indoor navigation and
environment; Access to advanced data analytics helps researchers and obstacle avoidance application; Facilities include simulated environments
developers to analyze performance, test and refine new applications with obstacle courses and mock buildings

Partnership with universities and industries - UAV test sites in USA High-speed network - Testing sites in China have access to high-speed
often partner with leading institutions and industries for operations which network which aids them in real time data processing and analysis. This
comes with development and access to new and improved technologies plays an important role in autonomous flight and intelligent logistics

Research and development facilities - Testing sites in USA have Access to 5G connectivity - Few applications like drone's swarms and
dedicated R&D sites to aid the development of drone technologies; drone to drone communication requires high speed communication and
Research and operational data is provided to assist the development of connectivity; Selected sites have access to 5G connectivity which
procedures, standards and regulations to facilitate UAV civil operations enables testing for applications mentioned above

Runway and airspace access - In USA, large drones have access to Charging stations - Sites haves dedicated charging stations for drones
runway and airspace for testing purposes ,in fact they can even access which helps in prolonged testing for applications likes long distance
the hangars surveying and package delivery

Source: https://www.faa.gov/uas/programs_partnerships/test_sites/locations, Secondary Research

44
 GOVERNMENT OF INDIA AIMS TO INCREASE THE NUMBER OF TESTING SITES IN THE
COUNTRY TO MEET THE GROWING DEMAND
2
1 Identified sites for testing / demonstration of UAS

How Indian government is promoting drone testing

of drones specific to defense through Defense
Testing Infrastructure Scheme (DTIS)
Sakkanpur
Phagwara
 DTIS was launched by Ministry of Defense to boost Sultanpur

the domestic defense and aerospace manufacturing Lucknow Daparijo

Airfield
Sivasagar
 The scheme has a runtime of 5 years with 400 crores Sonapur

outlay and a target to set 6-8 Greenfield Defense

testing infrastructure
Surendranagar

 Projects under the scheme would be provided 75% Surendranagar

Shirpur Airport Amravati

government funding in the name of Grant-in-Aid and
the rest 25% will be borne by Special purpose Aurangabad
Hyderabad
Ahmednagar
vehicle constituents
 In this regards, government has identified certain places Chitradurga

for setting up Greenfield testing site and EOI has been Coorg Vellore
published in the same regards Salem
Munnar Erode

Idukki
Source: Secondary Research
45
 PESTLE ANALYSIS ON THE DRONE
5 ECOSYSTEM IN INDIA
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46
POLITICAL ASPECTS
Government Policies
• The push and support provided by central government with the notification of various rules and regulations as well as
incentives for boosting supply and demand as being appreciated well by the stakeholders within the ecosystem.
Taxation
• At present, GST is being levied by the government on the purchase of drones. However, majority of the stakeholders
including manufacturers and end-use consumers suggested to pause the present taxation structure till the time a
sufficient demand has been built within the space through large-scale demonstrations and declining costs.
Industry Regulations
• The government has incentivized supply and demand with the introduction of PLI scheme for manufacturing and
schemes such as Sub-Mission on Agricultural Mechanization intended to boost the demand, especially on the
agriculture sector. However, the need for synchronization among the center and states as well as timely disbursement
of incentives has been stressed upon by the manufacturers to ensure effective implementation of schemes.
• To provide necessary boost to start-ups within the ecosystem, majority of stakeholders have highlighted need for
relaxation in qualifying criteria for government tenders to allow participation from start-ups, thus, providing a platform
to showcase their capabilities and build a portfolio of hands-on project experience.
Global Trade Agreements and Restrictions
• India aims to become a global drone hub by 2030 by on ensuring indigenization of the drone supply chain. This has
been supported by initiatives such as PLI scheme as well as the ban on the import of foreign drones. Indian
government is looking into liberalizing policy for the export of drones in the near future.
• Indian government is also looking into certain global trade agreements; one such example being Project Agreement
signed between Ministry of Defense & US Department of Defense under Defense Technology & Trade Initiative
focused on collaborations in design, development, demonstration, testing and evaluation of systems.
Source: India & US sign Project Agreement for Air-Launched Unmanned Aerial Vehicle (PIB, 2021), Year End Review 2022 for Department of Commerce, Ministry of Commerce and Industry (PIB, 2022)
47
ECONOMIC ASPECTS
Market Demand and Growth Potential
• Indian drone market value is expected to grow at rate of ~58% from 2020 levels to reach 2.95 lakh crores by 2030.
Along with drones the market for support service is also expected to grow.

Foreign Investment and Exchange Rates

• To cater the growing demand and technological needs, the Indian drone industry is heavily dependent on foreign
investment and stable exchange rates. With recent currency swap deal between India and Japan, countries wouldn’t
require dollars to trade between themselves and this would help bring stability in exchange rates
Labor Cost and Availability
• Biggest advantage that India as a country has been the availability of labor in abundance which solves the problem
of availability and brings in cost effectiveness too
Globalization
• Availability of cheap and skilled labor, favorable government policies , stable economic growth and the high expected
growth rate makes India for a favorable county for spread of technology, goods and products, information and even
investments
Pricing competition
• Imposition of GST on the drones which takes the prices on the higher side making it a price sensitive market
• Government has launched schemes to aid the manufacturing of drones but there is lack of synchroneity between
finalized and actual disbursement of fund , funds which can be used to decrease the price and boost the demand
• Government is providing funds for manufacturers and on the other hand GST is being imposed which ultimately brings
the prices on more or less the same levels and this has been emphasized by the stakeholders
48
SOCIAL ASPECTS
Sector Experience and Language of Training and Capacity Building
• Training and capacity building of end-use consumers is very crucial in the journey of drone adoption across its various
application areas. For the same, having pre-requisite sector experience as well as availability of training in local
language are essential to ensure effective training and capacity building. The need for multi-lingual information and
training material is underlined, especially across agriculture sector, by the stakeholders at various levels as the
language requirements for the end-use consumer varies drastically among regions and states.

Building Expertise: Knowledge Sharing and Stewardship

• As the demand for drones is expected to increase in the future, present end-use consumers are expected to play a
crucial part in the journey. The knowledge gained can help in boosting demand within the respective sector through
targeted knowledge sharing and stewardship programmes, thus, building the required expertise.
• At present, there are 40 drone schools have produced over 2500 certified drone pilots. The Ministry of Civil Aviation is
working towards increasing the number of schools to 100 and number of certified pilots to 10,000.

Building Demand: Demonstration and Outreach

• Demonstrations and outreach are expected to be the building blocks to build demand for drone applications. They are
expected to led the ‘wildfire’ revolution by demonstrating the use-case for the technology across different application
areas. Sector and region-specific demonstration programmes can help in building the required demand.

49
TECHNOLOGICAL ASPECTS
Innovation and Advancements
• Indian drone industry is seeing technological advancements which is making it more attractive market. R&D in the
field of edge and fog computing, development of autonomous and hybrid drones and drones which can run on
alternative fuel sources are few examples of technological advancement
• As per the stakeholders robust manufacturing which increase the quality of products and brings down the cost of
drones is missing in India but this can be improved through collaboration

Increased use of Artificial Intelligence and Machine Learning

• Use of AI & ML have become an integral part of drone ecosystem these days making them more autonomous and
enhance their capabilities in areas like object detection, tracking and collision prevention

Cyber Security
• Cyber security is going to be an issue with increasing number of drones in sky. Companies are focusing on
increasing the security by updating the drone's firmware, use of VPN and ensuring the drones are equipped with
Return to Home(RTH) for enhanced safety
Infrastructure
• Dedicated centers for research and development of drone technologies have been operational in India where the
prime focus is on to develop new technologies to enhance the drone ecosystem in India and to cater the growing
demand.
• Institutes like Indian Institute of technology Delhi, Kanpur, Guwahati have done incubation hubs dedicated to
research and development.

50
LEGAL ASPECTS
Lack of Type Certified Drones
• At present, there are only 11 type certified drones present in the market. This number is reported to grow in the coming
years as Ministry is targeting to provide type certification to 20 more drone manufacturers with the next year.
• However, many manufacturers have highlighted that there is deployment of non-type certified drones due to limited
type certified drones available in the market and lack of strict compliance for deployment of type certified drones. The
lack of legitimate players ensuring quality of the products deployed may influence future demand negatively.
• Additionally, certifications are only present for drones for use within visual line of sight (VLOS). The need for
certifications for drones for use beyond visual line of sight (BVLOS).

Illegal Operations and Malpractices

• Most of the manufacturers have highlighted that there are certain illegal operations and malpractices taking place
across the drone application space, especially in the agriculture sector, which would create a negative impression of
the new technology and, thus, impact the future demand.

Passport Requirement Hindering Drone Adoption

• Presently, passport is mandatory to obtain drone pilot certificate. However, it is a challenge for many end-use
consumers, especially farmers, as they don’t have a passport and hesitate in applying for the same as they are
reluctant to contact the police for their clearance as is required for a passport.
• The stakeholders have raised these concerns about the same at multiple levels while requesting a change in the pre-
requisite requirement.

51
ENVIRONMENTAL ASPECTS
Shift to Alternative Fuel Sources
• Drones that operates on fossil fuel adds on the pollution which is increasing on an alarming rate which has led to
increase in demand for drones which can operate on alternate fuel sources like hydrogen powered fuel cells, solar
powered drones. Research is ongoing and there are developments in this field .

Environmental Restrictions
• Government of India has few regulations in place to keep a check usage of drones to protect the environment and
prevent pollution
• The Civil Aviation Requirements for drones in India specifies maximum permissible noise level and maximum flying
altitude for drones
Procurement
• Procurement of drones and related components have a significant environmental impact. Companies these days
focusses more on using of recyclable material for manufacturing parts of drones without compromising on the quality
• Government has introduced Sustainable Public Procurement which promotes use of eco friendly products, reduce
waste and carbon emissions
End-of-life Management
• With growing demand for drone applications, there is a potential for huge amount of electronic waste that will be
generated in the due process, from faulty machines to the machines that have served their life. This raises the
questions for sustainability and end-of-life waste management. As the growing market is at a nascent stage, there is
a huge uphill task which shall require collaborations and support from research and development to capture the
potential offered by end-of-life management for the drone industry.

52
PESTLE ANALYSIS
Knowledge sharing and stewardship as well as demonstrations and outreach Being a nascent stage, there is huge potential for innovation and advancement in
are the building blocks for the growing ecosystem by developing channels for technology for the development of new technology as well as commercialization
ensuring demand and expertise within the market. Additionally, knowledge of the of the newly developed technologies. Integration of technological advancements
application area/ sector and availability of multi-lingual information can help such as AI & ML with the drone to enhance drone application along with building
build the local demand. the necessary infrastructure for deployment and ensuring cyber security are
other potential areas of collaboration among stakeholders.

There is a huge potential for drone industry within India as has It is important to ensure strict compliance on the various
been forecasted by various studies. However, as majority of aspects including type certification to ensure a stop on
the technology is imported, Indian drone market is illegal operations and malpractices of drones, which may
dependent on foreign investment & stable exchange rates. negatively influence the perspective of end-use consumers
and, thus, future demand.
While incentives are provided by Social Technological
government to boost demand and Removal of pre-requisite requirement
supply, levying of GST on the other of passport to avail drone pilot
hand has led to price sensitivity of Economic Legal certification can help in building local
products within the market. demand as consumers are reluctant to
apply for the same as it requires
obtaining clearance from police.
The push and support
provided by the government Shift to alternate fuel
with the notification of various sources as well as ensuring
rules and regulations and Political Environmental end-of-life management are
liberalization of ecosystem some of the key questions on
has been appreciated by the the environmental aspect of
stakeholders. drone use requiring solutions.

53
 6 CONCLUSION
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54
INDIA AND JAPAN JOINING HANDS

PRESENT INDIAN MARKET INDIA-JAPAN JOINING HANDS

• The Indian market offers huge potential for the • Japan has undoubtedly become a leader in
deployment of drones in the airspace across innovation and technology. Japan's progress in the
different application areas. Policy and regulatory fields of automation, robotics, and artificial intelligence
push offered by the Government has provided the is likely to continue to thrive for the better.
necessary support to the new players entering the
• Taking advantage of the relevant technological
ecosystem.
capabilities and knowledge, synergies for
• Although majority of the components for drones are technology transfer and capacity building must be
imported, there is a growing market for domestic explored for supporting India’s vision of
manufacturing of these components and overall indigenization of drone supply chain and, thus,
indigenization of the supply chain, wherein at becoming a global drone hub by 2030.
present challenges included ensuring quality and
• Support in component-level hardware
cost-effectiveness of the products.
manufacturing and R&D as well as establishment
• The massive deployment of drones in the future of testing and data centers within India would
would lead to increase in testing requirements as provide huge untapped potential for growth.
well as amount of data being captured, thus,
• Drone adoption and mobilization of investments,
underlining need for testing centers as well as data
especially at corporate level, would help in
centers for managing and processing the data.
commercialization and, thus, building the demand.

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POTENTIAL INDIA-JAPAN COLLABORATION AREAS
Drone Hardware Manufacturing and Designing Capabilities
• Support in component-level hardware manufacturing, especially for flight controllers, chip
components, motors, propellers, radio links within India as well as support in developing designing
capabilities will not only help in catering domestic demand but also opening-up the market for export.
Manpower support from India and technology transfer from Japan would help in providing the
necessary support on the supply-side of the value chain.
Drone Testing and Data Management Centers
• To cater to multi-fold increase in demand for drones within the Indian market, the
India-Japan demand for testing centers is expected to increase to support research and integration
of new technologies as well as ensure compliance of drone manufacturing with
Collaboration standards outlined by guidelines and regulations.
Areas • The multi-fold increase in demand for drones is also expected to induce an exponential
increase in amount of data being captured and, thus, leading to a demand for data
management centers to manage and process the huge chunks of data captured.

Research and Development of Drone and Drone-Related Technologies

• The Japanese companies as well as research institutions do have the relevant technological
capabilities and knowledge on the technological advancements within the drone industry. While Indian
technical institutions, including IITs, have been working to support the research and development in
the drone ecosystem, stakeholders have expressed the need for technology transfer and capacity
building in a bid to support R&D within the drone ecosystem.
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WAY FORWARD FOR INDIA-JAPAN COLLABORATIONS

Targeted Stakeholder Enabling Technology Transfer Assessment of Future Formulation of Business Plan
Consultations and Capacity Building Infrastructure Requirement for Joint Ventures
• Targeted stakeholder • An overview of the present • Based on the level of • Once all the preliminary
consultations will gaps and future technology transfer and assessment and
assist in assessing opportunities will help us capacity building required, consultations are
the present gaps and assess the level of an assessment of completed, the formulation
future opportunities technology transfer and infrastructure requirements of the business plan for the
within the drone value capacity building which is would help in defining the formation of joint ventures/
chain required within the drone objective for collaborations collaborations would help
value chain and formation of joint in defining the roles and
ventures. responsibilities within the
partnerships.

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