Budget 2024: Drone Tech Startups Want Regulations To Be Eased, More Focus On Defence Sector

The drone tech sector has emerged as one of the most significant segments within the country over the last few years, with potential to transform manufacturing and other industries, agriculture and defence sectors, among others.

The increasing usage and demand for drones has resulted in a number of Indian startups emerging in the space in the last decade or so. According to Inc42’s Indian Drone Tech Startup Landscape & Market Opportunity Report 2023, the Indian drone market is predicted to reach a size of $13 Bn by 2030 from $2.71 Bn in 2022.

Currently, over 200 drone tech startups are operating in the country, looking to gain share in the fast-growing market. Garuda Aerospace, Marut Drones, BonV Aero, Skylark Drones, Skye Air Mobility, and Preimage are among some of the drone tech startups in the country. Besides, two drone tech startups – ideaForge and DroneAcharya Aerial Innovations – have even gone on to list on the exchanges.

The government also recognises the growing importance of drones and has taken a number of steps over the years to promote the industry and make India a drone hub by 2030. 

However, the drone tech startups believe that more needs to be done to further encourage the growth of the sector and are hoping that some of their demands would be fulfilled by finance minister Nirmala Sitharaman when she presents the interim Budget in the Parliament on February 1.

From extension of the PLI scheme for drones and further easing of regulations to incentives for research and development (R&D), the drone tech sector has a long wishlist for the upcoming Budget. Let’s take a look at some of the key demands.

Easing Regulations & Extension Of PLI Scheme 

The government has taken a number of steps in the past few years to streamline the rules and ease compliance requirements for the drone sector, which was heavily regulated in the past. The liberalisation of drone regulations and the launch of the Digital Sky Platform by the Directorate General of Civil Aviation (DGCA) has made the regulatory process simple for the drone tech industry.

However, the startups in the sector are seeking further simplification of the rules and faster approval processes for drone operations, especially those pertaining to urban air mobility solutions which encompass use cases such as food and medicine deliveries.

“Startups are seeking the relaxation of certain restrictions, including altitude limits and no-fly zones. In the context of urban air mobility, drone startups may also expect regulatory support for testing and implementing urban air mobility solutions. This could involve collaboration with urban planning authorities and the development of appropriate infrastructure,” said Prateek Srivastava, founder and managing director of DroneAcharya. 

Echoing similar sentiment, Prem Kumar Vislawath, CEO and founder of Marut Drones, said, “Fine tuning policies and quicker clearances will help the drone industry achieve its true potential of making India a drone hub by 2030.”

Vislawath also pitched for extension of the production-linked incentive (PLI) scheme for drones and drone components, saying it would help startups.

The Centre is providing an incentive of INR 120 Cr between FY23 and FY25 to manufacturers of drone and drone components under the PLI scheme. The Ministry of Civil Aviation disbursed INR 30 Cr to the beneficiaries of the scheme in the financial year 2022-23 (FY23).

Meanwhile, Agnishwar Jayaprakash, founder and CEO of Garuda Aerospace, said that the drone tech industry is seeking lower interest rates for drone loans and service-linked incentives to open up new opportunities. 

“In anticipation of Budget 2024, the drone industry hopes for a boost with reduced interest rates on drone loans and a decreased GST for both drone sales and services…,” Jayaprakash said.

Promoting Use Of Agri & Defence Drones  

The Centre launched the Namo Drone Didi scheme last year to train rural women across the country, with the help of self-help groups, in operating drones. One of the objectives of the scheme is to increase the use of drones in agriculture for crop assessment, digitisation of land records, and spraying of insecticides, as FM Sitharaman announced in her Budget 2022 speech.

However, the drone tech startups want the Centre to take more steps to promote use of drones in agriculture and skill the farmers in operating the drones.

“In Budget 2024, a 100% subsidy to farmers on drone training certification programmes through Skill India would support the drone ecosystem of the country. GST waiver on drones, allied products, software, training, and licence could be an excellent step towards that future,” Vislawath said.

Besides, the drone tech sector is also hoping that the government would take steps to incentivise the use of drones in the defence sector in this year’s Budget. This becomes even more important as it would help the government in its goal of reducing reliance on imports for defence by promoting indigeneous products. It also has the potential to lead to an increase in the country’s exports.

“Defence drone startups are expecting the defence drone budget to grow by 4X this financial year. Drones are becoming the cheapest alternatives to perceive aerial threats,” said Satyabrata Satapathy, CEO of BonV Aero.

He added that drones have a critical role in the defence sector, be it for surveillance, reconnaissance, logistics or kamikaze. As such, Satapathy expects the Indian army to procure thousands of logistics drones in the coming years.

“This year, a big change is happening – 80% of the drones bought will be from Indian companies, supporting the ‘Make in India’ effort,” said Satapathy.

ideaForge, Garuda, SkyLark Drones, DroneAcharya, Throttle Aerospace are among the prominent drone tech startups which operate in the defence sector.

The drone companies in the defence sector are seeking higher allocation for the development and deployment of advanced drones, including both unmanned aerial vehicles (UAVs) and unmanned ground vehicles (UGVs), with a specific emphasis on surveillance and reconnaissance capabilities in this year’s Budget. 

Besides, they also want allocations for R&D in cutting-edge drone technologies like autonomous capabilities, artificial intelligence applications, and advanced sensor technologies.

However, Jayaprakash expects agriculture to be the main focus of the government when it comes to drones in this year’s Budget.

“With a shift towards agri drones, agriculture is seen surpassing defence in the drone sector in the upcoming Budget, driven by successful initiatives such as Namo Drone Didi and Viksit Bharat Sankalp Yatra,” he said.