Drone industry needs deeper localisation as import dependence poses risks: DFI

Smit Shah, president, Drone Federation India.

India’s rapidly expanding drone industry faces a critical challenge in reducing its dependence on imported components, even as domestic manufacturers make progress in drone assembly, certification and defence orders, according to the Drone Federation India (DFI), a not-for-profit, industry-led body representing India’s unmanned aerial vehicle (UAV), drone and counter-drone ecosystem.

“The dependence on foreign-made motors, batteries, flight controllers, communication systems and rare earth magnets leaves the sector vulnerable to supply disruptions and export restrictions,” said Smit Shah, president of DFI.

Speaking to The Hindu ahead of the Bharat Drone Stack Conference 2026, which opens in Bengaluru on November 12, Mr. Shah said India had made considerable progress in building a domestic drone manufacturing ecosystem but had yet to develop a comparable supply chain for critical components.

“We have built a strong assembly base, and more than 160 drone models now hold type certificates. But a drone is only as Indian as the parts inside it, and most flight-critical parts are still imported,” he cautioned.

According to him, the vulnerability has become more apparent with China progressively tightening export controls on drone-related technologies. Following restrictions on certain drone components in September 2024 and rare earth magnets in April 2025, China is set to widen controls to autopilots, radios, motors and speed controllers from November 18.

Dependence on any single country for critical components poses a strategic risk, particularly when supply restrictions can disrupt manufacturing at short notice, he said, adding: “Any single source for a flight-critical part is a risk, because supply can be cut overnight.”

The conference, organised by DFI at the Bangalore International Exhibition Centre, is expected to bring together more than 80 Indian component manufacturers, policymakers, defence representatives and technology developers. DFI is expected to release a policy paper, Making the Swadeshi Switch, outlining 22 recommendations to strengthen domestic component manufacturing.

Among its key proposals are introducing Indian-content requirements in drone type certification, defining what constitutes a drone kit to prevent imported assemblies from being passed off as domestically manufactured products, and gradually increasing import duties on components for which Indian alternatives are available.

Mr. Shah acknowledged that higher duties could marginally increase costs in the short term, but suggested that a predictable, phased tariff structure would give manufacturers time to develop domestic sourcing arrangements. He added that the challenges extend beyond manufacturing capacity to the availability of raw materials, specialised testing facilities and long-term financing.

China accounts for about 94% of global permanent magnet production, while developing indigenous semiconductor capabilities for production-grade drone autopilots could take five to seven years, he noted.

Smaller component manufacturers also face difficulties in securing patient capital to finance multiple rounds of product development and testing before receiving commercial orders. DFI has therefore called for research grants, collateral-free credit and shared testing facilities.

Mr. Shah said the civil drone market also needed stronger policy support. Certification for beyond visual line-of-sight operations and a functional unmanned traffic management system would be essential to scale up applications such as deliveries and logistics. “Civil demand is important because it provides the volume that makes a component maker’s business viable beyond defence orders,” he emphasised.

DFI estimates that the Indian drone industry could grow from ₹5,720 crore at present to around ₹97,300 crore by 2030-31, with the domestic drone component market alone targeted at $3.08 billion.

He said DFI would take a series of recommendations to the concerned Ministries and agencies after the conference, with progress to be reviewed at the next edition in 2027.

Published - November 11, 2026 11:33 pm IST