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A flight towards innovation
Articles- Feb 28,25
India’s drone manufacturing industry is on a fast track to becoming a global leader, driven by innovation, supportive government policies, and growing demand. With applications spanning defence, agriculture, surveillance, and logistics, Indian companies are rapidly developing indigenous drone technology, says Sanskriti Ramachandran.
In the vast expanse of India's skies, a transformation is unfolding, one that promises to redefine industries, reshape economies, and reimagine possibilities. The Indian drone industry, once an overlooked segment, is now soaring to new heights, fuelled by a blend of ingenious technology, government support, and entrepreneurial spirit. In 2022, the sector was valued at $2.71 billion, and by 2030, it is expected to grow to $13 billion, with a CAGR of 22%. This rapid expansion is not just about machines taking flight; it is about India positioning itself as a leader in drone innovation, manufacturing, and application across various sectors.
Drones are no longer futuristic novelties; they are becoming indispensable tools in agriculture, infrastructure, logistics, and defence. In agriculture, precision farming using drones is transforming how farmers monitor crop health, conduct land surveys, and apply pesticides with remarkable efficiency. Meanwhile, infrastructure inspections have become safer and more efficient with drones surveying power lines, bridges, and pipelines. The economic potential of drones extends far beyond these applications, leading to increased investments and a focused policy push from the government to harness their full potential.
Government-led growth initiatives
The Indian government has implemented a multi-faceted approach to stimulate growth in the domestic drone sector, combining regulatory reforms with financial incentives and strategic initiatives. One of the most significant policy measures is the restriction on the import of foreign-made drones, except for research, defence, and security applications. This move aims to strengthen India's domestic manufacturing capabilities and support local startups.
Additionally, 90% of Indian airspace has been designated as a 'green zone', allowing drones to operate up to 400 feet without requiring security clearances for non-commercial purposes. This airspace liberalisation encourages more extensive drone usage across different industries. To further boost local production, the government introduced the Production-Linked Incentive (PLI) Scheme, allocating Rs 1.2 billion over three years to provide manufacturers with a 20% incentive on value addition.
To drive innovation, the Drone Shakti Initiative was launched in FY 2022-23, focusing on promoting drone-as-a-service (DrAAS) applications. This initiative is fostering the growth of drone-based solutions across industries. Additionally, regulations have been streamlined to reduce entry barriers for domestic startups and international investors. The government has also allowed foreign-controlled Indian companies to operate drones, making it easier for global players to enter the Indian market. With an ambitious goal of attracting $600 million in investments over the next three years, these reforms are setting the stage for rapid advancements in drone technology.
Another significant change is the reform of pilot licensing. Ministry of Civil Aviation has replaced the traditional drone pilot license with a more accessible Remote Pilot Certificate (RPC), which can be obtained through government-approved drone schools. This change is expected to increase the number of trained drone operators in India, further accelerating industry growth.
"The drone industry is evolving rapidly, particularly in miniaturisation, endurance, and AI-driven capabilities. The key challenges include policy consistency, level playing field for mid-sized firms, and access to large-scale contracts. While government policies have evolved positively, further improvements in MSME participation and procurement rules would be beneficial. Our approach involves leveraging policy incentives, building a strong local ecosystem, and advocating for competitive fairness in technology-based bids. Policies supporting MSMEs, such as exemption from Earnest Money Deposits (EMD) and relaxed past experience requirements, have enabled us to participate in defence contracts. The push for Atmanirbhar Bharat has facilitated technology absorption, and further policy evolution can enhance opportunities for mid-sized companies like ours to contribute more significantly," says Vikas Batra, Director, Aero A2Z.
Transforming industries with drone technology
The growing adoption of drones is revolutionising industries across India. In logistics and e-commerce, companies are exploring drone-based solutions to enable faster and more efficient deliveries, particularly in remote regions. The healthcare sector is also benefitting, with drones being used to transport medical supplies, vaccines, and emergency aid to inaccessible areas.
"As the industry advances, key trends include significant improvements in battery technology, such as the development of high-energy-density lithium-sulfur and solid-state batteries, which are extending flight times and enhancing drone capabilities. AI and machine learning are revolutionising drones, enabling autonomous flight paths, real-time decision-making, and smarter data processing. Additionally, the rise of autonomous drones, including swarming technology and advanced obstacle avoidance systems, is driving greater operational efficiency. Data analytics and edge computing are also becoming more integrated into drones, allowing real-time data processing for faster and more informed decisions. Furthermore, the integration of 5G and IoT systems is transforming drone connectivity, enabling seamless operations, remote control, and large-scale collaborative tasks. Lastly, as regulatory frameworks evolve, drones are increasingly being incorporated into commercial industries, ensuring safe operations and fostering growth in sectors like agriculture, logistics, and surveillance," says Agnishwar Jayaprakash, CEO and Founder, Garuda Aerospace.
Boosting R&D for future growth
Research and development (R&D) play a critical role in sustaining India's progress in drone technology. Strengthening R&D capabilities will ensure that India remains competitive on the global stage.
"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," says Raghavan Viswanathan, Partner – Deal Advisory, KPMG.
Viswanathan highlights the need for a more robust R&D framework, 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 or 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. 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.
Overcoming regulatory challenges
Despite the rapid expansion of India's drone sector, challenges remain, particularly in taxation and regulatory approvals.
"India's defence sector is rapidly advancing toward self-reliance and modernisation, with drones playing a pivotal role. Key trends include rising military UAV adoption for border surveillance, logistics, and tactical operations; AI-enabled warfare with autonomous UAV swarms enhancing battlefield strategy; growing private sector involvement with startups partnering with defence PSUs; and significant export potential as India positions itself as a global drone hub," says Satyabrata Satapathy, CEO, BonV Aero.
High-flying future
India’s drone industry is no longer just about innovation, it’s about transformation on an unprecedented scale. With strategic government support, a surge in investments, and technological advancements, the sector is set to redefine the landscape of multiple industries. The nation is not just catching up with global leaders; it is on the verge of surpassing them. As India continues to break barriers in drone technology, the sky is no longer the limit, it is just the beginning.
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Graphs courtesy: KMPG
Source: KMPG, Wright research
Photo
credit: Freepik
KPMG
Raghavan Viswanathan
Satyabrata Satapathy
Garuda Aerospace
Agnishwar Jayaprakash
BonV Aero
Aero A2Z
Vikas Batra
drone
drone manufacturing
defence
Sanskriti Ramachandran
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