Market Intelligence
Aerospace and Defense India

India’s Unmanned Aerial Vehicle Market

India’s unmanned aerial vehicles (UAVs) market presents opportunities for U.S. exporters of advanced technologies in commercial UAV’s.

The Government of India (GOI) has focused on acquiring advanced technologies to meet demands in the security and defense sectors. One such emerging technology is the Unmanned Aerial Vehicle (UAV), which now plays a significant role across sectors in India and around the world.

In FY2020, India’s UAV market was valued at $830 million, and it is projected to grow at a compound annual growth rate (CAGR) of 14.5 percent during the 2021–2026 period, despite the effects of the global pandemic on many sectors of the economy. The Indian UAV market has the potential to cross $900 million by the end of 2021, which is significant given the global market for UAVs rests at $21.47 billion as citied by Observer Research Foundation (ORF).  

UAVs have played a critical role during the COVID-19 pandemic in a wide range of areas, including as a mechanism for law enforcement and as a delivery platform for healthcare products and as an e-commerce delivery platform. However, due to intermittent lockdowns imposed in countries around the world that manufacture and supply UAVs and related components, there have been halts or delays in production supply chains due to shortages of raw materials and staff needed to carry out manufacturing and assembly operations. Though there are opportunities for U.S. UAV and component manufacturers to export to India, it should be noted that there is burgeoning domestic manufacturing in the sector, and therefore the local competitive landscape is increasing, both for civil and defense purposes. The Indian government’s ambitious “Make in India” initiative, designed to foster indigenous manufacturing in a wide range of industry sectors, has led to the emergence of joint ventures in the UAV sector. There are also many Indian startups that have ventured into the UAV space.  

Indian UAV Policies & Reforms:

In June 2021, India’s Ministry of Civil Aviation (MoCA) released a new set of drone laws and regulations for anyone operating an Unmanned Aerial Vehicle in India. According to the new rules, operating a UAV will require applying for and receiving a unique identification number, unless the operator is granted an exemption. In order to receive this identification number, UAV operators will be required to submit details on the Digital Sky platform, which is a MoCA-led initiative to manage UAV operation and traffic in India. Some Indian state governments have also crafted unique UAV policies to attract investments in this sector.  

Information on the new rules can be found at: https://egazette.nic.in/WriteReadData/2021/229221.pdf  

Opportunities: 

As with the global market for UAVs, the Indian market is segmented into three main categories: Original Equipment Manufacturers (OEM), End Users, and Aftermarket. The available types of UAVs include rotary wings, fixed wings, high-altitude long-endurance (HALE), medium-altitude long-endurance (MALE), and unmanned combat aerial vehicle (UCAV). Apart from manufacturing, opportunities exist in the areas of hardware, software applications, and value-added components. 

The commercial UAV market is currently experiencing exponential growth, becoming more widely utilized in the following sectors in India: agriculture, forestry, mining, power, railways, construction, highways, e-commerce, homeland security, smart city and urban development projects, and media. Applications include site inspections, surveillance, and monitoring to capture and disseminate real time data. 

In the defense sector, there are opportunities for anti-drone system, specifically, in the areas of sensors, phased array radar, Radio Frequency (RF) sensor, electro optical and infra-red (EO/IR) systems, navigational satellite jammer systems, and RF jammer and laser directed energy weapon (Laser-DEW) systems. The requirement of anti-drone systems has further enhanced after the recent UAV attack on the Indian Air Force station in Jammu. In addition, there is scope in the areas of border security, counter insurgency and crime control, and anti- terrorism applications.   

Challenges: 

  • The policy landscape for UAVs in India creates some challenges hindering potential end users from maximizing the usage of UAVs in their operations.   
  • The current drone rules note that all UAV importers are required to obtain a “Certificate of Manufacture” followed by an application to the Directorate General of Civil Aviation (DGCA) via the Digital Sky platform. Upon approval from DGCA, the importer must apply for issuance of an import clearance certificate to the Directorate General of Foreign Trade (DGFT). Import of unmanned aircraft vehicles/systems shall be regulated by the Directorate General of Foreign Trade (DGFT).
  • International suppliers may need to invest in training and certification programs to impart the necessary skills to operate their UAVs in India. It is important to build up this infrastructure to ensure that the industry is not bottlenecked with supply issues.
  • “Make in India” incentives, including relaxation of FDI regulations may encourage international suppliers to enter joint ventures or invest in manufacturing or assembly of UAV’s in India.  This will add local competitors to the already burgeoning landscape of indigenous manufacturers, making it more challenging for international OEMs to compete on price. 

To successfully enter the Indian market, U.S. companies should consider the following key factors:

  • The Indian market is diverse and complex. Companies need to carefully research and analyze the market, including relevant regulations and policies and the competitive landscape. 
  • Success in India hinges on finding the right partners. Take time to carefully consider and select partners that have knowledge of the local market, the regulatory landscape, and business procedures. 
  • Maintaining consistent follow-up and supply.
  • Ensure that your market entry strategy allows for patience.
  • Remain committed to the market, not losing sight of milestones and objectives. Diligence, commitment, and regular communication with your partners is critical to success.

For more information, contact the U.S. Commercial Service’s India Aerospace & Defense team:

  • Geoffrey Parish, Principal Commercial Officer, North India; 
  • Nisha Wadhawan, Senior Commercial Specialist, Aerospace and Defense Team Lead; and 
  • Theodare Immanuel, Senior Commercial Specialist, Aerospace and Defense Team Member.
09/13/2021