Opportunities and Obstacles in India’s Drone Market

India, like Japan, is a relative newcomer to the global drone market – but that’s about to change. With the globe’s second largest population, India remains a highly agriculture-dependent economy, with an enormous agro-export sector that ranks seventh worldwide. That means the country has a persistent need for drones that can map, inspect and fertilize large expanses of farm land while also monitoring and protecting the wide array of livestock responsible for basic subsistence.

Currently, the  governments of major farm states like Karnataka, Madhya Pradesh, Haryana, Punjab and Tamil Nadu are collaborating with drone manufacturers, farmer producers and state agriculture universities to develop fertilizer-spraying drones. The same state governments are collaborating with local universities to train farmers how to fly and maintain their drones.

India’s central government, led by Narendra Modi, is supporting these and other initiatives with its own fresh incentives.  In January, the government offered a 100% subsidy to state training and testing institutes and agriculture universities to promote the use of drones.  Part of India’s concern is that while demand for food products is rising rapidly worldwide, supply of farm labor within India is shrinking.  Technology of various kinds, but especially drones, because of their enormous cost and time saving potential, can help close that gap, but in today’s hyper-competitive landscape,  government and industry need to move quickly.

Drone exporters outside India can penetrate the country’s huge import market if they are willing to be patient and also accommodate India’s traditional emphasis on encouraging domestic production.  India is relaxing some of these rules to speed drone capital investment but foreign suppliers are still encouraged to engage in joint ventures and partnerships that allow local manufactures to grow and expand their own operations as foreign technology is shared.

That means there’s still lots of red tape.  For example, all drone importers to India are first required to obtain a “Certificate of Manufacture.” The next step is to apply for approval from the Directorate General of Civil Aviation (DGCA).  Assuming the DGCA gives its approval (which is far from guaranteed),  importers must then apply for an import clearance certificate from the Directorate General of Foreign Trade (DGFT).  And get ready: the entire import process – with additional steps required along the way – will be closely regulated by the DGFT, virtually ensuring a succession of bottlenecks.

Is it worth it?  It could be.  India envisions a vast expansion of its drone market over the next five years alone.  The agricultural drone market alone is expected to quadruple in size by 2028, according to the market research firm Boway International.  But drones are also needed in forestry, mining,  power, highway and building construction, e-commerce, homeland security, “smart” city and urban development projects.

In addition, thanks in part to a August 2021 UAV attack on the Indian Air Force station in Jammu, the defense sector is also an emerging priority.  With the help of foreign suppliers, the government is eager to import the latest anti-drone detection technology but also wants UAVs for border security, counter insurgency, crime control and counter-terrorism.  All in all, India’s drone market offers fresh opportunities but also significant but surmountable challenges for drone suppliers ready to embrace them both.  But it may take patience and perseverance to obtain the desired benefits.

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