The new production linked incentive (PLI) scheme for manufacturers of remotely piloted aircraft (RPA) — or drones — and their components announced by the government on September 15 is in line with the Drone Rules 2021 announced in August.
The PLI proposal shares the drone policy’s philosophy of giving a leg-up to the drone industry in India, earmarking Rs 120 crore spread over three financial years for drone manufacturers. Experts point out that this is twice the pooled revenue of all the commercial RPA manufacturers in the last one year alone.
In fact, the statistics only get better when one considers that the PLI scheme will, in effect, provide companies making drones and drone components more than 20 percent of the value addition. That this PLI rate is to remain constant for all the three years is a remarkably generous concession lent to the RPA industry, as the rate usually diminishes every year in other sectors.
In a statement issued by the Ministry of Civil Aviation, the government has declared its intention to “fix the minimum value addition norm at 40 percent of net sales for drones and drone components instead of 50 percent, another exceptional treatment given to the drone industry…The incentive payable to a manufacturer of drones and drone components shall be simply one-fifth of value addition. PLI for a manufacturer shall be capped at 25 percent of the total annual outlay.”
These sops reflect the faith of the government in India’s budding RPA industry whose annual sales turnover is expected to register a seven-fold growth in the next couple of years. A mushrooming drone ecosystem is definitely a big step towards the eventual use of the RPA for extensive applications — from precision agriculture (where farmers send drones to monitor crops and collect soil data) and the energy sector (where drones perform routine tasks such as maintenance) to carrying out civil protection and humanitarian missions, and making commercial deliveries (including the transport of emergency medical supplies). This means the RPA industry will become a magnet for large investment while simultaneously creating thousands of jobs in the drone sector in the coming years. As Prime Minister Narendra Modi tweeted, “This will give an impetus to manufacturing and bring the sector at par with global trends as well as best practices.”
From all accounts, the PLI scheme is to be run on an experimental basis initially for three years. Thereafter, it will be extended with adequate modifications based on a thorough evaluation “in consultation with the industry”. This is just as well considering the RPA have yet to make an impact in the subcontinent — except, of course, for military drones, and the RPA flown by hobbyists that are few and far between.
So policymaking in this budding industry will likely be particularly difficult as stakeholders such as government agencies, companies and investors explore the evolving RPA ecosystem, and its untested applications to refine their strategies. Ideally, policies regarding the manufacture and use of drones should be built on international legislation or regulation, much like aviation law which has traditionally been regulated at an international level.
On their part, drone companies need to reciprocate the concessions the PLI scheme offers by scrupulously following best practices in technical requirements while designing and manufacturing the RPA. For instance, the installation of collision avoidance systems and automated landing systems, and parachute deployment (similar to the airbags in a car) — in case control of the drone is lost — on the RPA should be made mandatory. It is also a good idea for the manufacturer to provide a safety statement to the customer every time a drone delivery is made, explaining the rules and regulations the drone operator needs to know. This will help maximise transparency and accountability in the industry while augmenting user awareness.
One of the most challenging technical barriers in building a drone ecosystem is to fully integrate the RPA into India’s national airspace. Drones operate alongside manned aircraft in the same shared airspace and follow the same air traffic management systems and procedures. Besides fixed wing aircraft, helicopters too will often share airspace with drones, and this warrants new regulation to minimise the risk of collision between helicopters and drones.
Indeed, as more and more RPA take to the air, maintaining systemic safety by merely segregating operations will become complicated. Manufacturers must, therefore, think out of the box to develop new technologies — be it detect-and-avoid systems or navigation aids to help ‘blind’ drones in areas where GPS signals fail — that can help overcome these hurdles.
Policymakers should not lose sight of the wood for the trees either by overlooking other key components in the drone ecosystem, such as transport and delivery. This involves creating a robust support system such as battery charging stations and multiple take-off and landing pads for the RPA. Stakeholders will do well to consider these challenges while fine-tuning policy in a rapidly changing environment where the RPA constantly evolve by integrating transformative technologies.
With a large number of RPA expected to populate the skies of tomorrow, dynamic collaboration across industry and government is imperative today to chart out an effective roadmap for the emerging RPA ecosystem.
Prakash Chandra is former editor of the Indian Defence Review. He writes on aerospace and strategic affairs.
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