Drones: Clipped Wings

Business World

Remember May 2014, when a pizza chain got into trouble with the Mumbai police for using a drone for pizza delivery without permission? That was a marketing gimmick gone wrong. Following all the media attention, the Mumbai police started grilling the pizza chain about using drones without prior permission.

Less than five months later, in October 2014, the DGCA (Director General of Civil Aviation) banned civilian/non-governmental use of unmanned aerial vehicle (UAV) and unmanned aircraft systems (UAS) without permission from a set of security authorities including the Ministry of Home Affairs (MHA). The drone market is still infantile so investors weren’t anyway rushing to fund it. Then this directive came along and made life more miserable for those unfortunate enough to fall in love with drones.

ideaForge has been doing pioneering work on drones since 2007 and has raised $10 million from Infosys, Walden Riverwood Ventures and IndusAge Partners so far. “It was difficult trying to get funds for this. We started when drones weren’t a buzzword,” says Ankit Mehta who is cofounder and CEO of ideaForge.

Life After The Drone Ban
Lt Commander (retired) John Livingstone is the CEO of Noida-based Johnnette Technologies. When the drone ban kicked in, Livingstone and a consortium of drone industrialists put together and submitted to DGCA 29 pages of guidelines for using drones. This was in February 2015. That draft may well have been the harbinger to the draft law the DGCA proposed in April 2016 for civil usage of UAVs — a 9-page air transport circular detailing particulars like weight categories, what weather and where to fly these unmanned pieces of technology.

The draft raised some hopes of finalising drone laws. But not for long. “The draft has been in trap mode,” says ideaForge’s Mehta, who was part of the Ficci committee set up by ex-home secretary G.K. Pillai, a month after the draft law was formed. The committee’s purpose was to get industry recommendations and feedback on the drone bill. “The bottleneck is not with the DGCA but with the MHA. They are too weary of doing anything that might come back to bite them,” says Mehta.

According to Karan Kamdar, founder and president of the Indian Drone Racing League (IDRL), and CEO of 1 Martian Way Corp, the ban is being lifted only in bits and pieces. The likes of Kamdar and Gaurav Mehta, founder of Quidich, provider of drone services for aerial cinematography, say, to make sure there are no run-ins with the law, they get approvals from the police and regulators, and try to adhere to the draft as much as possible.

“However, this is tough for smaller drone startups and their clients,” points out Quidich’s Mehta. For instance, R2 Robotronics was a startup that even piloted some of their drone technology for the defence ministry. Nothing came out of it. Aman Singh, co-founder of R2 Robotronics says they are now working with the New Zealand government. Singh says he is unsure about the way the Indian government has dealt with this sector. “We do not know by when the industry will actually open up,” says Singh.

Indian Drone Market Snapshot
The drone market in India is growing, and can grow faster if proper regulations are put in place. T.V. Mohandas Pai’s family fund, 3One4 Capital, has backed SwarmX, a drone startup. “The market for manufacturing civil drones in India is under $100 million, growing at a CAGR of around 21 per cent today compared to the US where it is over $1.5 billion, which means that there is huge growth potential in India,” says Pai. While the demand for drones is continually rising, more clarity on the laws and implications will help this growth by a great margin, he adds.

Most of the drones used in India are from China (DJI is arguably, the global market leader). Israel is another leading manufacturer; Livingstone says that many Indian companies will make the parts for the drone, which are then assembled in Israel and sold across the world.

Surprisingly enough, India has over 35 Indian drone startups either manufacturing drones, developing software related to drones or companies providing some sort of drone service. Prices of drones vary with its capabilities from toy drones at Rs 5,000 to very sophisticated ones crossing Rs 20 lakh.

“Drones and UAVs have seen huge growth in the past one year. We have more than 300 suppliers for this category and have seen a 15x jump since last year,” says Sumit Bedi, VP, marketing at IndiaMART.

Imagine how much faster the market would grow if it had clear regulations. Anirudh Rastogi, managing partner at law firm, TRA, who consults drone companies, says “The drone activity we currently see in India is just a fraction of what is possible given an enabling regulatory environment. Currently even test flights for research and development are not easily doable, and some of our clients prefer other jurisdictions to carry out these activities.”

How Long Will It Take?
Rastogi says, “There are serious concerns holding up the drone regulations — national security and safety of the airspace for aviation. However, while other jurisdictions have since introduced regulations, India continues to struggle to address these concerns.”

That’s especially ironic because drone laws in a smaller country like Sri Lanka were ratified in October 2016. And Sri Lankan UAV companies like the one headed by Tilak Dissanayake are ready to make the most of it.

Dissanayake says, “We will initially license the drone for manufacture in Sri Lanka, and will certainly manufacture under license in other countries as well since our plan is to build and sell 2-4 million units worldwide.”

Which means companies from smaller markets have a clearer path to success than those in a larger market like India. While running a diverse country like India may call for weary tiptoeing around laws that affect socioeconomic sensibilities poles apart, too much weariness means the innovators will only lose hope and faith.

A news wire had reported earlier this month on reasons behind the hold up. “The issue of tracking drones is a very major technological challenge. How does one track whether a particular drone is bonafide or rogue. We are working on solving that technical aspect,” the news report quoted Civil Aviation Secretary R.N. Choubey.

“Other countries have figured this out, they are just making up excuses,” says an industry insider. Livingstone has a more practical approach to end this wait. “The PM’s Office must move things along. They are the only ones who can at this point.”