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India aims for global drone export leadership: Raghavan Viswanathan
Interviews- Feb 27,25
The Indian drone industry has the potential to emulate the remarkable successes observed in the automobile sector in the forthcoming years, opines, Raghavan Viswanathan, Partner – Deal Advisory, KMPG in an interview with Sanskriti Ramachandran.
How would you describe the current state of drone manufacturing in India, and what are the key growth drivers?
Drone manufacturing in India is still at an extremely nascent stage given the component ecosystem predominantly lies outside the country. Drone firms in India continue to be assemblers than an integrated product manufacturer. However, the outlook for the industry is extremely positive with it ticking the 4 key boxes required for any sunrise sector-
a. It should solve a real-world problem and be value additive to the end user
b. Possess multi-dimensional use cases
c. Presence of a vibrant supply ecosystem including start-ups willing to invest
d. Regulatory push
With these tailwinds, the commercial drone market which stands at approximately Rs 23 billion in FY25 is expected to grow at least four-folds in the next 5 years.
How have government initiatives like Atmanirbhar Bharat and Make in India influenced the domestic drone manufacturing sector?
Drone imports were banned by the government in 2022 to encourage local manufacturing which in turn brought a wave of investments into drone start-ups in the country. The government continues to back the industry, especially in agricultural use cases with drones being mentioned several times in the annual budget speeches of late. It is critical we develop a local ecosystem of component suppliers and MROs for drones to completely utilise its potential in the Indian market.
How and which advanced technologies are shaping drone manufacturing in India?
AI, Li batteries, motor tech and material science are the largest disruptors for drone manufacturers in India. The need to make drones lighter, smarter and more efficient is a continuous process that gives manufacturers the edge over competition.
What is the effect of lack of localisation on imported components?
With no domestic ecosystem of components, we leave ourselves open to supply chain disruptions from source markets and limited ability to adapt the technology for India specific use cases. This also limits the innovations that are possible within the drone industry in India since R&D’s focus can only remain on cost reduction and developing new applications rather than value addition and IP creation.
What regulatory hurdles are currently impacting drone manufacturing and deployment in India?
Differential GST structures for various drones (5%-28% based on end applications), is severely impacting the market potential for drones in the country. Limited support for the ecosystem players i.e. component manufacturers, MROs, pilot training academies also limits the investments flowing into these critical sub-segments of the drone industry. Additionally, BVLOS guidelines and unavailability of Unmanned Aircraft System Traffic Management (UTM) protocols have also limited the use cases for drones in India severely impacting its market potential and innovations in the sector.
Possible solutions would include:
a. Enhancing financial incentives: Extend government-backed projects to stimulate demand across various industries beyond agriculture. Faster clearances for trusted players: Domestic manufacturers with secure, compliant drones should get priority approvals.
b. Upgrading digital sky platform: Modernise the platform to enable real-time digital approvals, minimising bureaucratic delays.
c. Prioritising trusted players: Grant priority approvals to domestic manufacturers who produce secure and compliant drones
How can India enhance its research and development capabilities to drive innovation in drone technology?
The following measures could act as a boost for R&D in drones in India:
a. Mandates to localise the supply chain and support the drone OEMs with additional PLIs/ subsidies
b. Certification programs and workshops can help build expertise in drone design, development, and operation.
c. PLIs for drone component manufacturers
d. Mandatory allotment of funds from the start-up fund to the drone sector for R&D initiatives
e. Infrastructure development: Establishing dedicated drone research and testing facilities, such as airstrips, flight labs, and prototyping centres, can provide an environment for innovation. These facilities can support the design, development, testing, and certification of drones.
f. Collaboration with academic institutions: Institutions like IIT Kanpur and IIT Mandi are playing a crucial role in advancing drone technology. Strengthening partnerships between academic institutions, government bodies, and industry can foster innovation and provide the necessary infrastructure for research and development.
g. Developing home-grown technologies and reducing dependence on foreign imports can strengthen India's drone ecosystem. Indigenous solutions, such as the Vehicle-Mounted Counter-Drone System, showcase India's capability to innovate and address modern challenges.
What’s your vision for India’s drone manufacturing industry in the coming years?
The Indian drone industry has the potential to emulate the remarkable successes observed in the automobile sector in the forthcoming years. Our goal extends beyond achieving self-sufficiency in drone manufacturing; we aim to become a prominent global exporter of drones. By targeting markets in South Asia and Africa, which share similar drone specifications for agricultural and industrial applications, we can establish a robust international presence.
Our strategy should encompass the following key components:
• Strengthening domestic capabilities: By fostering innovation and investment in research and development, India can enhance its domestic drone manufacturing capabilities. This includes the development of advanced technologies and the establishment of modern production facilities.
• Policy and regulatory support: Government policies and regulations play a pivotal role in shaping the drone industry. Continued support through streamlined approval processes, financial incentives, and favourable regulations will create an enabling environment for growth.
• International collaboration: Partnering with global leaders in drone technology can accelerate the transfer of knowledge and expertise. Collaborative efforts can lead to the development of advanced drone solutions tailored to the specific needs of diverse markets.
• Market expansion: Identifying and targeting high-potential markets in South Asia and Africa will be crucial. These regions offer significant opportunities for the deployment of drones in agriculture, industrial inspections, logistics, and disaster management.
• Focus on sustainability: Ensuring that our drone solutions are sustainable and energy-efficient will enhance their appeal in global markets. Emphasising green technologies and eco-friendly practices will align with global trends towards sustainability.
• Skill development and training: Building a skilled workforce capable of designing, developing, and operating advanced drones is essential. Training programs and certification courses will ensure a steady supply of talent to drive the industry's growth.
By implementing these strategic initiatives, India can position itself as a leader in the global drone market, driving innovation, economic growth, and technological advancement.
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