Key Drivers Expected to Propel The Indian Drone Industry over the next 5 years

By Sai Pattabiram

The Hijacking of an Indian Tactical drone in August 2024 followed in Rapid succession by the Manipur Drone Bombing and the Hezbollah attack in September 2024 have resulted in the realisation of drones being a dual use technology among policy makers in the Indian drone ecosystems.

These incidents have highlighted two very serious Red Flags as far as the Indian drone ecosystem is concerned namely :

1. Questionable Cyber Security of Drones procured from Indian manufacturers
2. Very high dependence of the Indian drone ecosystem on Chinese components .

These serious red flags have catalysed policy makers both in the defence and civilian ecosystems into proactively formulating policies to address both these fault lines on a mission mode basis which has the potential to position India to be among the first countries to start using secure non Chinese drones in its ecosystem . Hence while the Indian Drone ecosystem is facing severe adverse situations of order cancellations and withholding of government schemes on account of the above red flags in the longer term it will open up opportunities at a global scale .

The key drivers that will propel the Indian drone industry over the next 5 years are

1. Geo Political Driver: Global shift from China +1 to Any Thing But China ( ABC ) is India’s opportunity to leverage its trustworthy technology partner reputation built by India’s IT Industry and Global South leadership to propel its fledging drone industry to global leadership .

2.  Government Policy Drivers :

1. 1. Aiming to shift the global supply chain for drone components from China to India
   2. Supporting development of indigenous component and subsystem level competencies/ Ecosystems
   3. Design and Production linked incentive schemes for indigenous component and drones with high indigenous content
   4. Supportive import and export regulations to facilitate the evolution of the Indian drone industry to be a Global Hub for Secure Drones by 2030 .

3.  Technology and Technical Drivers :

1. 1. Need for continuous innovation and adaptation : The useful shelf life of innovation under active field conditions in the case of the Russia – Ukrainian war has been 8-10 weeks resulting in the need for continuous adaptation of drones to meet changing field conditions . Hence indigenous control of the various current and future technologies that will be deployed in unmanned systems will be an essential from the National Perspective . Ability to adapt technologies and products to changing field requirement will be a key technical driver going forward .
   2. Indigenous Supply Chain : The ability to build technical competencies to design , develop mad manufacture the entire range of drone components required across all categories of unmanned systems and their use in other allied use cases will be a key driver for the Indian drone industry
   3. Existing Coding Competencies : India’s existing coding competencies from the IT Industry will be a huge technological driver for the drone industry going forward .
   4. Proprietary Technologies will replace open source that has been largely used till date this will result in better product performance both from a customer experience as well as manufacturing perspective there by enabling drones to reach the predicted scale .

4. Autonomous Technologies will evolve with use of AI , ML enhancing safety of unmanned systems where like in the case of Airlines the role of the pilot will shift from flying the drone to monitoring its safe operations skill requirements will shift from flying to operations .

5.  Innovation & Startup Funding :

India’s current status as the world’s third largest startup ecosystems and its ability to attract as well as internally invest in startup funding will be a major drive that will drive the drone industry over the next five years

6.  Scaling through Delayering into clearly demarcated Business Verticals :

The Drone industry till date has been a consolidated mass with no clear demarcation between manufacturers and service providers , everyone was doing everything from assembling drones to delivering services . This in itself has been the major factor limiting its ability to scale to its potential because each individual assembler was buying components independently there by unable to leverage economies of scale as an industry . This was a major negative from an investment perspective as well as differentiated business models did not exist within the industry .

Going forward the policy changes towards indigenisation of drone components , cyber security etc. will result in the delayering of the drone industry into a Tiered system similar to the ones followed in other matured industries resulting in better differentiated business models among drone companies as a consequence of which they will attract investment to scale to their potential be it manufacturing or services .

In conclusion the Indian Drone Industry must see this new need for “Innovation as an opportunity and not a threat“ – Steve Jobs

(Author is Founder & MD of Zuppa Geo Navigations Pvt Ltd.)