Local drone manufacturing can reach ₹1.8 lakh crore by 2030

India’s domestic drone manufacturing industry, which is seeing increasing interest from a wide range of sectors, holds potential to be worth ₹1.8 lakh crore in the next eight years. A report published earlier today by the Federation of Indian Chambers of Commerce and Industry (FICCI) and consultancy firm EY India noted that uptake of drone usage in industrial operations, retail services and agriculture, as well as their applications in India’s defence forces, would represent a business opportunity of ₹98,000 crore within 2030.

According to the report, the next three years could see a high growth pace of homegrown drone manufacturing, with an expected compound annual growth rate (CAGR) of 80% by 2025. The growth pace of the domestic drone manufacturing industry could subsequently slow down with increasing adoption of drones in various sectors, but is still expected to grow at a CAGR of 35% between 2025 and 2030.

The report offers a larger industry estimate in comparison to the production-linked incentive (PLI) scheme for drone manufacturing and development offered by the central government, which stated that homegrown drone manufacturers could be valued at around ₹5,000 crore in volume of business by 2025. The PLI scheme was unveiled in March this year.

In July this year, the Ministry of Civil Aviation released a list of 12 drone manufacturers and 11 drone component manufacturers that have been selected to receive incentives under India’s drone PLI scheme.

India has been steadily adopting drones across a wide range of applications, since the union government liberalised the use of drones for commercial and consumer purposes in August 2021. This year, on August 8, industry body Drone Federation of India signed a memorandum of understanding (MoU) with the Army Design Bureau, an organisation under India’s defence forces, to design and manufacture drones as per customised orders for the latter.

Under this MoU, drone manufacturers in the country have been invited to offer proposals for building custom drone solutions for India’s armed forces — the first phase of which includes building custom drones for use in Himachal Pradesh.

To be sure, the Indian Army has already procured drones custom manufactured to its specifications from private Indian companies. Mumbai-based Ideaforge announced last year that it has won and completed a $20 million contract from the Indian Army to design and build drones for the latter. In January this year, Ideaforge announced that it has received a second similar contract to supply more drones to the Army.

In July this year, a Moneycontrol report claimed that the Indian government is planning to unveil a services-linked incentive scheme for drone manufacturers, which could see the latter being offered cash incentives to custom-build drones for various applications in the public sector.

In the commercial space, a number of private drone manufacturers and service providers have also increased efforts to tie up with companies for pilot trials. Skye Air Mobility, which is one such startup, announced a commercial pilot programme with Gurugram, Haryana-based cloud kitchen company, Curefoods, in July this year to operate drone deliveries between its warehouse and kitchen.

In August, the company announced a partnership with Flipkart Health, a division of the eponymous e-commerce company, for delivering medicines in Kolkata.

Such services have also seen trials with various state governments, as well as the World Economic Forum through its ‘Medicines From The Sky’ initiative.