Drone Sector

Overview

Although it is still in its infancy, India's drone industry is expanding quickly. The Drone Rules, 2021, which have streamlined the legal environment for drone operations, are only one of the measures the Indian government has done to encourage the sector's growth.

India's drone industry has the potential to contribute significantly to economic expansion. Over 5 lakh employees are anticipated to be created in the sector over the next three years, and the annual sales volume of the drone services industry is anticipated to exceed Rs. 30,000 crores.

The backing of the government: The Drone Rules, 2021, which have streamlined the legal environment for drone operations, are one of several measures the Indian government has done to support the expansion of the drone industry.

The availability of skilled labour: India has a sizable labour force that is skilled in electronics, software development, engineering, and other fields. This workforce may be used to create and produce drones.

The increasing need for drones Numerous sectors, including security, logistics, and agriculture, are seeing an increase in demand for drones. In the upcoming years, this need is anticipated to increase further.

Application of Drones

Agriculture: A wide range of agricultural uses, including crop monitoring, pesticide application, and fertiliser delivery, are possible with drone technology.

Logistics: Drones may be used to monitor cargo movement while it is en route and to deliver products and services to remote locations.

Security: Drones may be used for disaster assistance, border security, and monitoring.

Media and Entertainment: Drones may be used for aerial photography, videography, and the creation of special effects for films and television programmes.

Drones may also be used for a wide range of other things, such as environmental monitoring, animal protection, and search and rescue.

Key Facts

• Number of drone start-ups in India: There are over 200 drone start-ups in India, with a combined valuation of over $1 billion.
• Annual sales turnover of the drone services sector: The annual sales turnover of the drone services sector in India is projected to cross Rs. 30,000 crores by 2025.
• Number of jobs created by the drone sector: The drone sector is expected to create over 5 lakh jobs in the next three years.
• Market size of the drone sector: The market size of the drone sector in India is projected to reach $10 billion by 2026.
• CAGR of the drone sector: The drone sector in India is expected to grow at a CAGR of 10.23% between 2023 and 2028. The Indian government has set a target of achieving a $1 billion drone industry by 2025.
• The government has also launched a PLI (production-linked incentive) scheme for drone manufacturing, which is expected to attract investments of over Rs. 12,000 crores.
• The drone sector is expected to positively impact several industries, including agriculture, logistics, and security.
• The drone sector is also expected to help India in its efforts to achieve self-reliance in defence.

Opportunities

Vast and expanding market: With a population of more than 1.3 billion, India is a vast and expanding market. As drones are employed for a larger range of applications, the drone industry is anticipated to expand quickly in the years to come.

Government assistance The Indian government has put in place a variety of policies to encourage the expansion of the drone industry. Among these is the Production-Linked Incentive (PLI) plan, which offers financial rewards to businesses that produce drones and drone parts in India.

Various uses for drones exist in agriculture, surveying, logistics, and security. This variety of uses offers the drone industry a number of options for expansion.

Low-cost production: The cost of manufacturing drones is falling, making them more affordable for businesses and individuals. This is likely to drive the adoption of drones in a wider range of applications.

Challenges

Lack of regulations: The drone industry in India is still developing, and the usage of drones is not governed by any explicit or uniform laws. Businesses who wish to employ drones may face difficulties since they must ensure they comply with the law.

Limited manufacturing capacity: India still has a little drone production capacity. Due to the high cost of imports, the majority of drones deployed in India are foreign-made. The government of India is aiming to grow the drone manufacturing industry, and in the upcoming years, domestic drone production is anticipated to rise.

technological know-how: India's drone industry is lacking in technological know-how. That may become a challenge for businesses that want to use drones, and they need to find people with skills and technical expertise to operate and maintain Drones. 

Analysis

Revenue Growth: Over the years, the drone industry in India has constantly shown strong revenue growth. There was a 60% increase in revenue from 2020 to 2021, a 50% increase from 2021 to 2022, and then a 40% increase from 2022 to the projected revenue in 2023. This suggests that the sector's income is rising steadily.

Revenue Trend: From 2020 to 2023, India's drone industry had a huge revenue increase. From INR 100 crores in 2020 to a projected INR 336 crores in 2023, the income rose. This shows a clear upward trend, pointing to a favourable market reaction and rising consumer demand for drone-related goods and services.

Operating Profit: The drone industry's operating profit has grown over time. Operating profit was INR 20 crores in 2021, INR 40 crores in 2022, and INR 84 crores in 2023, according to estimates. This shows that the industry has been successful in controlling expenses and boosting profitability.

Overall, the data indicates that India's drone industry has seen considerable revenue and profitability development over time. This might be due to elements including rising drone technology use across sectors, technological improvements, and supportive regulatory regimes.

Long-Term View:

Long-term projections indicate that India's drone business would expand quickly, reaching $10 billion in revenue by 2026. Government backing, rising demand, and declining prices are a few of the elements that are fuelling this expansion. India is in a good position to take the lead in the drone industry on the world stage because of a sizable and expanding market, a helpful government, and a trained labour force. The Indian economy is anticipated to be significantly impacted by drones, which will increase productivity across a variety of industries.

Analyst  -  Roshan Patel

info@smartinvestment.in
 

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