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How India’s drone import ban is a short-term shock

Can drone businesses rely on local manufacturing in India? How does the ban on imports affect startups and service providers?

India is already one of the top drone-importing nations. The domestic ecosystem is slated to be worth billions of dollars in the near future. (iStock)

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The ban, earlier this month, on the import of drones in an effort to promote domestic industry has left manufacturers and users both shocked and hopeful. Shocked, because it leaves them floundering in the short term. Hopeful, because they believe local manufacture may pick up in the longer term.

Essentially, according to the directorate general of foreign trade, the ban includes drones that are in completely built-up, semi-knocked-down or completely knocked-down forms. Components can still be imported. The ban doesn’t apply to government entities, educational institutions recognised by the Union or state governments, recognised R&D bodies and drones for defence and security purposes. All imports, however, will still need due clearance.

Also read: Will drones change the way we deliver medicine?

At present, India is better placed in software than hardware. And when it comes to manufacture, better at building bigger drones, in the 100-150kg range, than the smaller ones (2-25kg) likely to see greater demand—in fields ranging from food delivery to retail and healthcare. According to a white paper published by the research and social innovation think tank Ola Mobility Institute in November, India currently has about 100 drone manufacturers and over 200 drone service providers.

It’s already one of the top drone-importing nations. The domestic ecosystem is slated to be worth billions of dollars in the near future. According to the Ola Mobility Institute report, India is expected to be the world’s third-largest drone market by 2025. Data from the global market intelligence firm BIS Research says the Indian drone market is expected to touch $1.81 billion ( 13,575 crore) by FY2026.

So, how does the immediate ban on imports affect startups?

“It will be a bit of a challenge for the industry,” accepts Mughilan Thiru Ramasamy, co-founder and CEO, Skylark Drones, a Bengaluru-based drone data solutions company. “Today, every component you see in a drone—motors, batteries, propellers—is imported, except for the carbon fibre or plastic frame. Right now, you can’t import a fully-made drone. In almost 90% of use cases, everything from wedding cinematography to other applications, the drones are imported. They are not made in India. There will be a short-term shock.”

Most drone service providers have been using imported drones as workhorses, Ramasamy explains. In August last year, the government came out with a liberalised drone policy, enabling the commercial use of drones and opening up the market for their application in a variety of segments—from agriculture to delivery and logistics. This was followed by the approval of a production-linked incentive, or PLI, scheme that—according to a recent Livemint report—allocates 120 crore over three years for drone manufacturers, component makers and software firms. It also offers a 20% bonus on value generated by each company in the drone space.

The ban means that the imported drones already in the market—now a rare commodity of sorts—could become more expensive. Basic camera drones from the popular Chinese brand DJI start from approximately 20,000. Now, if drone companies and startups do rely on assembling these machines on their own, the cost of the individual components and the expenses in assembly would drive up costs considerably, says Ramasamy.

For companies like Skylark, it’s an opportunity, though reliability could pose a challenge. “Since we are a software company, we would love to see more reliable drones and different types of drones flying in the country. We need to have great hardware. Software runs on hardware at the end of the day,” he adds.

The Indian ecosystem has already seen many innovations in the bigger class of drones. In May, the Bengaluru-based Throttle Aerospace is planning to introduce its first 100kg cargo drone.
The Indian ecosystem has already seen many innovations in the bigger class of drones. In May, the Bengaluru-based Throttle Aerospace is planning to introduce its first 100kg cargo drone. (Courtesy: Throttle Aerospace)

Nagendran Kandasamy, founder and director of Bengaluru-based Throttle Aerospace Systems, a drone manufacturer, says the Indian ecosystem has already seen many innovations in the bigger class of drones. In May, Throttle is planning to introduce its first 100kg cargo drone. But India does lack in precision technology and manufacturing.

“It is easy to make a wall clock. But designing a small wristwatch is difficult. Similarly, we need precision technology to make small consumer drones,” Kandasamy explains.

There are other areas that need refinement—optics technology (for cameras), lithium (for batteries and power) and specialised magnets, says Kandasamy. “There will be some challenges (because of the ban). But I think we are right around the corner (in terms of filling some of these gaps).”

Experts say there are other critical bottlenecks: the manufacture of drone composites and motors. “The ecosystem will take some time to regroup and respond but it (the blanket import ban) is a step in the right direction,” says Umakant Soni, CEO and co-founder, ARTPARK (AI & Robotics Technology Park), an autonomous not-for-profit working on Artificial Intelligence and robotics, promoted by the Indian Institute of Science, Bengaluru.

Composites, in use for decades in the aerospace industry, are the material used to build a drone’s body or airframes. In the case of drones, carbon fibre is a common example. “Composites manufacturing in India is still not that big. This is an area where we need to push the envelope and accelerate our expertise,” says Soni.

“Similarly, there is only one company in the world—T-Motor in China—that makes small BLDC (brushless DC) motors, which help drones and UAVs (unmanned aerial vehicles) fly.... We need to build such companies in India,” he notes.

Software, often referred to as the drone’s brain, is one area where the country excels. One of the projects at ARTPARK, for instance, is focusing on building drone skyways—dedicated corridors for autonomous drones. “All three pieces need to be in place. There also needs to be a stable capital infrastructure to support such companies. Unlike software, where I can click and make multiple copies, making a physical drone costs money. Combining talent with money will lead to the right results,” Soni adds.

Also read: Why drones are tracking wildlife in Kashmir

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