How new guidelines can give wing to drone start-ups?

Relevance: On drone rules, 2021 and start-ups in the drone sector

Synopsis: India has fewer start-ups in the drone technology space than the US and China; it also lags behind most other economies in funding. Drone rules 2021 are a step forward, but more needs to be done to evolve other policies in tandem.

Context

The government recently announced new draft guidelines for drone operations in India. The Drone Rules, 2021, are a major revision to the drone policy in the country. While the government has made revisions to drone policy every year since 2018, it has not formalised any guidelines until now. Meanwhile, start-ups in the sector have multiplied.

Increased usage of drones

Before pandemic

the government has been using drones for mapping and banks have been relying on the technology for insurance

During pandemic

Various state governments took the help of drone startups during pandemic.

• Tamil Nadu government was struggling to sanitize areas, they had to rely on a Chennai-based drone start-up, Garuda, to disinfect hospitals. In the following months, Garuda was employed by various other states to carry out the same task.
• Maharashtra also announced that it would be experimenting with the delivery of medicines in rural areas using drones.

While the usage of drones is increasing since the government first launched its drone policy in 2014, many obstacles still remain.

Current scenario of drone-startups

India lags developed countries in this emerging sector.

• Less number of drone-startups: The US, the UK and China have more drone start-ups. While India has 157 companies running drone operations, China has 204 start-ups in the space, and the UK has 192 start-ups. The US, which is the breeding ground for most innovations, has five times more start-ups than India.
• Small funding size: Although Australia and Israel have fewer start-ups than India, data indicates that they outrank the country in terms of funding. The top 10 drone companies in India have been able to garner average funding of $5.1 million. Israel may only have 69 start-ups in the space, but their average funding size is $33.5 million. The funding size of Chinese start-ups is $107 million.

What more needs to be done?

The new draft drone rules, 2021, seem to address the shortcomings. By relaxing norms in the registration of drones and removing the need for licenses in certain categories, the government plans to open the sector for more innovation.

But, policy in other areas needs to change too.

• Changes in geospatial policy: The new geospatial policy, released in February 2021, requires freeing specific drone regulations and a liberal approach in AR/VR space.
• Changes in import norms: Similarly, while the government is allowing operations of drones in the country, the import of drones and drone components will still be controlled by the Director-General of Foreign Trade. As India does not have sizeable domestic drone manufacturing firms, most are imported and assembled in India. Stricter norms on imports shall mean more restrictions for the sector.