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Drone Manufacturing Companies In India Spreads Its Wings

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Drone Manufacturing Companies In India Spreads Its Wings
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The unmanned aerial vehicle (UAV) or the drone industry is flying high in India and aiming to achieve an annual sales turnover of ₹12,000 to 15,000 crore by 2026 from ₹80 crores.

The Government of India intends to make India a global hub for drone manufacturing by 2030. So, many domestic startups and business enterprises started stepping up harder to gain a competitive advantage in this highly-scattered market, which foreign players currently dominate.

Let’s look at the state of drone manufacturing companies in India, and how India aims to become the global hub for drone manufacturing by 2030.

Industry Overview: Drone Market in India

Over the years and with the advancement of drone technology, UAVs have proved their utility for civilian and industrial applications apart from military applications. The use of drones has found mentioned in many government schemes for the last-mile delivery of government services and implementation of policies.

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For instance, the National Highway Authority in India (NHAI) has mandated using drones for monthly video recording of all national highway projects under development, operations, and maintenance. In FY2020, the Indian UAV industry was valued at $830 million. As per IBEF, the industry may grow at a CAGR of 14.5% from 2021-2026. Also, Niti Aayog estimates that the Indian UAV market will be $50 billion over the next 15 years as drones will increasingly replace manned-aerial vehicles for surveillance and other activities.

The drone market in India is broadly categorized into three segments:

  • Original equipment manufacturers;
  • End users; and
  • Aftermarket

August 2021 to February 2021 saw 34.4% growth in drone startups. The country now has around 220 drone startups. In addition, drone startups have witnessed a massive jump in funding and valuation since the government established new drone rules in June 2021. According to Venture Intelligence, the drone industry in India has raised $87 million in funding through June 2022, up from $24 million seen in the previous 12 months.

Not only startups but corporations like Reliance Industry, DCM Shriram, Adani Enterprises, Rattan India, and Infosys are going big on drone manufacturing in India with investments in many drone manufacturing entities.

Top drone companies in the listed space include Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), Paras Defense & Space Technologies, and Zen Technologies.

Government Lightens the Policy Baggage on Drones

Government policies play a crucial role in any industry’s growth and survivability. Under the Make-in-India push, the government of India came up with new regulatory guidelines for the usage of drones in India in June 2021, bringing in recent reforms.

For instance, the government has done away with the requirement to take remote pilot license certificates for drones weighing up to 2kg for non-commercial purposes. Some other notable reforms include:

The Drone Airspace Map published in 2021 covers almost 90% of the Indian airspace, has a ceiling of up to 400 feet and is categorized as a green zone, reducing friction points between the industry and law-enforcing agencies.

The Drone Amendment (2022) rules scrapped the need for obtaining drone pilot licenses for drone manufacturing companies in India. In addition, the Ministry of Civil Aviation has taken other initiatives to make drone manufacturing in India a competitive industry with a lot of growth potential.

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Government’s Drone Manufacturing Push

In a bid to encourage companies to take up drone manufacturing in India and set up manufacturing bases, the government introduced the popular Production Linked Incentive (PLI) scheme.

The PLI scheme for drones and drone components manufacturing aims to provide production-linked incentive benefits of up to ₹120 crores spread over three financial years and incentives to manufacturers will be as high as 20% on value addition.

For example, if the net sales of Rs 100 crore and raw materials consumed are Rs 80 crore during the manufacturing process, the net value addition is Rs 20 crore. The PLI due on the value addition will be Rs 4 crore at a 20% rate.

And, one of the unique features of this PLI scheme for drone manufacturing is that the government has maintained a nominal level of eligibility norms for MSMEs and startups, offering a level playing field for all participants.

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India’s Chances of Becoming Global Hub for Drone Manufacturing

Compared to other global counterparts, drone manufacturing capability in India is at a very nascent stage but shows high growth potential over the long term. 

The world is slowly moving toward China, plus one strategy to reduce supply shocks. Increased VC investments in drone manufacturing startups, government steps like the ban on the import of drones, and the PLI schemes mean India can gain a substantial competitive advantage globally. 

Also, India’s mission to become a significant semiconductor manufacturer will help develop advanced drone technology reducing dependency on imports of raw materials. From terrain mapping to analyzing soil and field for effective farm planning, from delivering groceries at the doorstep to securing borders and industrial infrastructure, drones can create substantial economic and employment opportunities. 

India intends to become a world leader in drone technology development. It displayed its excellent manufacturing capabilities when an Indian startup, Botlab Dynamics, supported by the IIT-Delhi and the Department of Science & Technology, organized a spectacular drone show involving around 1000 Indian drones at the Beating Retreat ceremony.  

Read more: About Research and Ranking

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