Sai Pattabiram, Founder and CEO of Shree Sai Aerotech Innovations and Zuppa
In India, there are currently over 5 lakh remotely piloted aircraft systems (RPAS) or Drones, flitting over our airspace, but most of these Drones operating as of now are “illegal.”
Drone operations in any form have been banned in India since 2014. Yet, we see drones being widely used at weddings, big-ticket corporate and cultural events and even in political funerals. The drones that we see around us are either imported or smuggled, mainly from China.
There has been a spurt in Chinese drones in the Indian market after the Director General of Civil Aviation (DGCA) in October 2014 issued a circular completely banning use of drones. This effectively rendered all drone usage illegal, leading to a rise in smuggling of drones to India. Drones since have become a lucrative business for Grey Market Operators.
However, come December 1st, 2018, the current status for drones is set to change with the DGCA formalizing a National Drone Policy, which quashes the long-drawn confusion and ambiguity over drone operations in India.
The DGCA policy comes in the wake of the realization that these seemingly-harmless toys, which are commonly used for photography or as a sophisticated plaything, can become national security threat. These gadgets have the potential to be used for spying and could leak sensitive information and data to a neighbouring country, thus jeopardizing the country’s security.
The Drone policy assumes more criticality in the backdrop of the recent news of China entering into a deal with Pakistan to supply 48 high-end military drones to it.
The drone regulation, thus, couldn’t have, come at a more opportune time. DGCA came up with the policy after extensive consultations among various stakeholders. These new set of rules add registration and licensing regime to the entire process.
Understanding the economic impact of the existing ‘Parallel Drone Economy’ of the past four years is crucial for the successful implementation of the fledgling regulatory framework. If one has to assume that each current owner of the these 5 lakh “illegal” drones invested minimum Rs 1 lakh per drone, then an estimated Rs 5000 crore of Indian money has already been invested into these drones through Black Market cash transactions, based on which the current loss to the exchequer by way of taxes is around Rs 900-1000 crore. On-boarding the existing drones in the Indian Ecosystem could provide an opportunity for the governments to levy a Registration Tax on these drones, much like the Life Time Tax charged by RTOs at the time of Vehicle registrations, and recover this loss.
These current owners of drones have been delivering drone services to various clients, including Government Organizations, over the past four years and earning from it. The existence of these drones is itself a standing testimony to the failure at the implementation level of DGCA’s 2014 notification banning use of civilian drones. The hyper-local and diffused nature of drones is very similar to monitoring motorbikes or scooters rather than airplanes, a fact that is at the heart of the failure of Implementation of DGCA’s 2014 notification .
One can, thus, assume from the past experience that these existing drone operators would continue to operate irrespective of the regulatory framework. Hence, unless each owner is provided with an option to voluntarily on-board their existing Drone into the regulatory framework by way of a retrofitted device they would continue with business as usual. None would be willing to invest Rs 1 lakh further for a new regulatory compliant drone when having a perfectly operating one at hand, more so because they have been a witness to the failure of implementation of the earlier DGCA policy that allowed them to operate fairly unhindered till date.
With these regulations in place, drone technology can be adapted across sectors to explore a whole gamut of opportunities. At a time when drones are being used globally in a variety of applications, including agriculture, mining, etc., this new regulation by DGCA and notification by MORTH is expected to give a new lease of life to drone technology in India, and open doors to an arena of services involving high-end technology.