The Policy Wall

India’s drone hub ambition has run into a component problem. The country has the capability to become a global drone hub by 2030. But the transition from assembling imported systems to building a domestic technology base remains a bigger industrial challenge.

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Sai Pattabiram, founder and Managing Director of Zuppa Geo Navigation Technologies, a Chennai-based drone manufacturer, sees a warning in that proliferation. In his assessment, the low entry barrier has enabled many players to enter without necessarily the depth to scale globally. “Many drone players are just assembling Chinese products,” points out Pattabiram. For a global industry, manufacturing depth also means establishing standards as drones are moving deeper into defence applications.

From assembly to a technology base
Cybersecurity, resistance to jamming and spoofing and the ability to function in harsh electromagnetic environments are among the capabilities, Pattabiram believes Indian manufacturers need to demonstrate. Zuppa has had its product tested by the Standardisation Testing and Quality Certification (STQC) Directorate against the Army’s cybersecurity framework, although the framework has not yet been implemented. Such standards give Indian products greater credibility in overseas markets, particularly among buyers looking for alternatives to Chinese technology.

A policy paradox around components
A policy paradox around components The regulatory structure presents another challenge. The Directorate General of Foreign Trade (DGFT) prohibits imports of drones in completely built-up (CBU), semi knocked-down (SKD) and completely knocked-down (CKD) forms, while drone components can be imported. “This distinction creates room for component import and local assembly,” argues Pattabiram. There is also inconsistency in treatment of flight controllers. Indian manufacturers can import them, while exporting an Indian-made flight controller can face restrictions under the Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) framework. Indian manufacturers of motors, speed controllers, batteries and cameras are emerging, but they need sufficient demand to improve quality and achieve scale.

The cost of choosing Indian components
The regulatory burden does not end with imports. Manufacturers replacing an imported motor or flight controller with an Indian component are required to undergo type certification again. This creates a commercial disincentive for OEMs that have already invested in certification costs, particularly when the product has yet to generate adequate sales. “Every drone certification costs a minimum of Rs 10 lakh and sometimes can go up to Rs 40 lakh,” points Pattabiram. He proposes a more limited test when an equivalent Indian component is substituted, rather than repeating the entire process. The larger question is whether regulation can encourage indigenisation. “India has the potential and the capability to become a global drone hub by 2030. It is only a question of aligning various policies to pull in the same direction,” stresses Pattabiram.

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