3 minute read 11 Oct 2022
Drone hub in India

How India can become the drone hub of the world by 2030

Akshya Singhal
By Akshya Singhal

EY India Performance Improvement – Consulting Partner

With over 17 years of experience in the consulting domain, Akshya has in-depth experience in strategic planning of new solutions for government and public sector organizations.

3 minute read 11 Oct 2022
Related topics Government and Public Sector Technology Consulting
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The drone industry can help boost the manufacturing potential in India to ~US$23 billion by 2030

In brief

  • The government, private sector and startups need to adopt a strong collaborative approach to make India the drone hub of the world
  • High-quality products and reducing dependence on imports to propel the ‘Aatmanirbhar Bharat’ initiatives
  • Create an environment that encourages R&D, rewards innovation, and creates Indian IP ownership along with a financing mechanism to support startups or MSME companies working in the sector

India has shown exemplary resilience in emerging from the COVID-19 pandemic crisis. Currently enjoying the macroeconomic tailwinds, it is now competent to deal with the challenges emanating from current geopolitical developments. 

Over the next decade, India has the potential to exploit an opportunity that we cannot afford to miss —the drone revolution. The drone and its components industry can significantly strengthen India's manufacturing potential to US$23 billion approximately by 2030, according to the latest EY - FICCI report titled, “Making India the drone hub of the world”.  Making India a drone manufacturing power would not only contribute to the country’s target of a US$5 trillion economy, but also largely focus on the Make in India mission, and once delivered, its success will contribute to national prosperity across multiple sectors.

The government needs strong action plans to create a robust demand, boost manufacturing, attract investments, and facilitate exports. This action plan can help India offer the most competitive and innovative manufacturing capabilities to the world. However, this is possible only when the government adopts a collaborative approach for ministries to synergize their efforts to ensure rapid progress, along with encouraging startups and supporting organizations for the industry to scale up. There is a need to create an environment that encourages R&D, rewards innovation, and creates Indian IP ownership along with a financing mechanism to support startups or MSME companies working in the sector. 

The nation has the potential and the opportunity to emerge as a drone hub on the global stage. A strong case exists for a symbiotic relationship between the government and industry to realize our vision of making India the drone hub of the world by the year 2030.

Drone hub in India

Aatmanirbhar Bharat, the clarion call given by Prime Minister Narendra Modi, envisages India to occupy its rightful place as a significant player in the global economy, largely through measures that will be self-supporting and self-creating. In this context, a strong case exists for India to emerge as a global powerhouse in drones, as there would be a tremendous demand for drone services and thrust on manufacturing. This coming of drones to the Indian skies is being eagerly awaited, much like the ‘second coming’, after the Internet and GPS technologies that have revolutionized the Indian marketplace.

India’s drone story will have a trickle-down effect across multiple sectors and thus have the potential to alter the Indian marketplace.
Akshya Singhal
EY India Performance Improvement – Consulting Partner

The drone value-chain spans across manufacturing and value-added service components, impacting a large spectrum of industries and end-users, thereby having a significant manufacturing potential. Drones offer a large gamut of solutions across industries for aerial thermal inspection, aerial visual inspection, construction monitoring, surveillance and incident response e-commerce delivery, warehouse inventory management, intelligence, surveillance and reconnaissance missions, and as loitering munitions and target drones.

Some of the key recommendations and action points to transform this vision into reality include:

Demand creation

  • Various ministries/departments of the central government can provide a much-needed fillip to demand of drones by encouraging adoption in flagship schemes and projects.
  • States can help supplement the effort through policy and incentives.
  • Simplified procurement procedures, including a commitment to procure 25% of quantities in single vendor situations can boost demand.

Facilitating manufacturing

  • Collateral-free and personal guarantee-free project finance loans at low interest rates to start-ups and MSMEs from financial institutions can help boost manufacturing in the country. Operationalization of drone testing sites can further support manufacturers.
  • Government would also need to urgently support local manufacturing of components and value addition to increase localization to get quality with economies of scale.

Attracting investments

  • To inspire confidence in the Indian drone ecosystem, the government could provide an opportunity to a few anchor companies willing to commit investments to present ‘plans’ and ‘expectations’.

Enhancing exports

  • It would be imperative to resolve ambiguities in the Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) licensing process. Further, the procedure for taking drones abroad for international exhibitions and demonstrations merit simplification.

Other dimensions

  • It is imperative to remove the need for Industrial Licensing (IL) for drones that are not a part of the defense items list.
  • Government-to-government deals would facilitate transfers of technology and strategic partnerships.
  • An inter-ministerial committee on drones and counter-drones could act as a nodal body shepherding innovation, technology development, reciprocity issues and customs duties to make the drones sector globally competitive.
  • Due impetus on subsidizing skilling costs for training and development would be required to establish a drone ecosystem in the country.

How EY can help

Technology transformation

Organizations must consider foundational transformation rather than quick fixes and ad hoc investments to give them the agility to adapt.

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Summary

Drone technology is a sunrise sector, poised for exponential boom worldwide. India finds itself to be at a critical juncture in the evolutionary timeline of drone technology, wherein we have a time-critical window of one to two years to internalize and capitalize on drone technology to emerge as the drone manufacturing hub of the world.

About this article

Akshya Singhal
By Akshya Singhal

EY India Performance Improvement – Consulting Partner

With over 17 years of experience in the consulting domain, Akshya has in-depth experience in strategic planning of new solutions for government and public sector organizations.

Related topics Government and Public Sector Technology Consulting
Upvote