INSUBCONTINENT EXCLUSIVE:
Various companies are changing their stance and adopting drone technology.For quite some time now, we've been writing to you about the
massive opportunity in drone manufacturing.You can read our previous pieces on drones, here, here, and here.In fact, Co-head of Research at
Equitymaster Tanushree Banerjee spotted this opportunity over a year ago
She discussed why it's a 4x growth opportunity in drone manufacturing by conservative estimates.Well, it's official now.The government
has banned import of foreign drones with immediate effect.The import of any drones, either in completely built up (CBU), or completely
knocked down (CKD) / semi knocked down (SKD) forms is now banned
This is massive for drone manufacturers in India as well as startups who are involved in this field.A few exceptions, however, were made
Drones can still be imported for the purposes of defence, security, and research and development (R-D).The government, educational
institutions, and government recognised R-D entities will still be allowed to import drones in all forms
But they will need to get an import authorisation from the Directorate General of Foreign Trade
This would be provided after consultation with the relevant ministry.Also, the ban does not apply to the import of drone components.Why did
the Indian government ban import of drones?The move is aimed to promote domestic manufacturing of drones in India
India currently imports most of its drones and components from China and other countries
Indian drone manufacturers will no doubt have a grin on their faces now.This move has also opened a door of opportunities for new drone
Their potential customers will now have to buy drones from them rather than global firms.The government is doing everything it can to
encourage local manufacturing of drones to become self-reliant as a part of its Make in India program.How did the Industry React?The drone
industry was pleased.Here's the official response of Garuda Aerospace...It is a great move by the government
We are now getting calls from various companies on exploring opportunities
Now drone users/operators would have to deal with those having drone manufacturing facilities.The city-based Drones-As-A-Service (DaaS)
startup is putting up drone assembly units at Manesar in Haryana's Gurugram and Tamil Nadu's Hosur at an outlay of $3 million.This is
what Aarav Unmanned Systems said...Very encouraging news for the India drone ecosystem
With so many socially impactful use cases across the country, how long can we rely on borrowed technology and expertise?We see this import
ban as a powerful step in making India self-reliant
And there is a huge potential for India to become a big exporter of drone technology in the near future.Here's co-founder of Skye Air
They have actually given clarity on the import of components
Earlier, there was none.The Immense Potential of DronesToday, drones are not just used for security and defence purpose
There are many non-defence uses.Various companies are changing their stance and adopting drone technology.Take the mining sector, for
These companies are spending heavily to equip themselves with drones for regular business operations.Then there's oil exploration
companies like Indian Oil Corporation (IOC), which plan to use drones to monitor pipelines for safe operations.There's agriculture
companies like Dhanuka Agritech making large investments to promote the use of drone technology in the agriculture sector to boost crop
production.Zomato and Swiggy have already tested deliveries via drones.Logistics companies can't rule out drones as they help deliver
essentials including vaccines from one place to another in a short span.Drones also help telecom companies maintain telecom towers and
survey potential new tower locations.These were just a few examples
Other companies have also deployed drones.As you can see, drones are now used even by civilians as it offers multiple use cases
This just goes on to show the massive opportunity drones provide.You better start believing that drones are here to disrupt the market.Drone
Manufacturers get Wings to FlyThis is not the first time the government has given drone manufacturers wings to fly.The import ban on drones
follows the New Drone Rules 2021
This eased many norms on registration and operation of drones in India
It also rules reduced compliances and fees required to operate drones.Then came the production linked incentive (PLI) scheme worth Rs 1.2 bn
to boost the manufacturing of drones in India.On a conservative estimate, the PLI scheme for drones would generate investment of over Rs 50
bn and 10,000 direct jobs in India's drone manufacturing sector till fiscal 2024.It will also boost the total turnover of the domestic
industry to Rs 9 bn in the next three years.Most recently, in her Budget 2022 speech, Finance Minister Nirmala Sitharaman also mentioned a
big mission for Drones - Drone Shakti, aimed at making India a drone hub by 2030
This initiative will help make India's drone sector a US$5 bn market.A new integrated office is to be opened in the ministry of civil
aviation to facilitate faster growth, coordination and approvals for drones.Slowly and steadily, the government is giving wings to the
defence sector by imposing ban on certain items
Like last year, the Ministry of Defence (MoD) had announced a "Positive Indigenisation List" of 108 items of defence equipment that must be
sourced locally.Since December 2021, out of the 108 items, 49 items were banned for import and 21 would not be imported any more after the
The remaining items will be banned entirely by 2025.All this bodes well for defence manufacturers that are setting up capacities to meet
demand.Top Drone Companies in IndiaWe first wrote to you about the 4 Indian companies in the exploding drone market last year.In that piece,
we mentioned these 4 companies to watch out for...#1 Info Edge (India)#2 DCM Shriram Industries#3 Zen Technologies#4 RattanIndia
EnterprisesA few months later, we provided a detailed update on the plans of these companies.Since then, there are a lot of companies who
have ventured into or planning to enter the drone market.For instance, Infosys is invested in a drone-startup ideaForge since 2016
L-T also entered into a pact with ideaForge two years back to offer drones and allied systems for defence use.The newly listed Paras
Defence, via its subsidiary Paras Aerospace, has tied up with a few drone manufacturers in Israel, Latvia, - Italy.Even big corporates Adani
and Reliance have big plans.Reliance Industries has put together an aggressive plan to build its drone business which includes expanding
manufacturing capacity five-fold, participating in the new drone PLI scheme, and experimenting with limited logistics payloads to deliver
goods.Reliance will be carrying out its drone business through a Bangalore-based startup, Asteria Aerospace, in which Reliance has taken a
Asteria is a subsidiary of Jio Platforms.In the unlisted space too, startups are getting good funding
The recent budget gave a boost to startups and covered multiple aspects for the drone industry
It focused on promoting agricultural drones and the NABARD fund to support startups.Although at a nascent stage, the industry has a wide
scope and looks quite promising
So we're not far away from when India becomes a global drone hub.Co-head of Research at Equitymaster Tanushree Banerjee summed it up pretty
well in here recent editorial on defence stocks.Here's an excerpt:Recently, Turkey has developed an impressive local drone industry from
Armed Turkish-built drones have proven themselves in combat operations in Syria, Iraq, and as far afield as Libya
Turkish companies are developing a variety of lethal armed drones.They range from large, high-flying, bomb-laden ones to very small,
low-flying ones that can form deadly swarms.To put it simply, Turkey has now gained the attention of global defence experts
They believe Turkey could become the Middle East's drone superpower.The US was the first country to use drones as missiles after 9/11
But Turkey now rivals the US, UK, and China as the world's most advanced drone market.And all of this happened in the last six years.Like
India, Turkey too relied on defence imports for decades
But in 2016, Turkey stopped relying on allies who thought it was in an arms race with the US and other NATO countries
Developing its own military drones became a top priority.And the results are there for all to see
Companies like Boeing and Lockheed Martin acknowledge that the technology in Turkish drones is at par with theirs.So, the boom in Indian
defence manufacturing sector is not far away.You can read the entire piece here: War or Not, Defence Stocks are Set to Boom.Happy
Investing!Disclaimer: This article is for information purposes only
been edited by TheIndianSubcontinent staff and is auto-generated from a syndicated feed.)
