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Explaining the Drone Rules, 2021

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Explaining the Drone Rules, 2021

The usage of drones in India for commercial purposes has extensively increased, as the country marks a fundamental shift in the applications of nascent technologies. Drones nowadays can be profusely used in the areas of agriculture, mining, deliveries, cinematography, photography with multiple other purposes. With the advent of the Covid -19 pandemic, the usage of drones in India catapulted for various functions and is now considered as an exigent technology to address several issues. In pursuance of the same, the Government of India realized the pertinent usage of drones and ordered its regulation to monitor its official handling. Recognizing the need for legislation, the Government introduced the Unmanned Aircraft System (UAS) Rules, 2021 earlier this year to regulate and monitor the usage of drones for commercial purposes. However, this rule drew brickbats by the experts and companies engaged in the businesses of drones and was considered restrictive for investment purposes as well. It was also believed that these rules truncated the prospects of growth in this area.

Acceding to the responses, the Government of India drafted and implemented new rules that are considered to be the catalyst for the prolific usage of drones in India. With the aim of making India a ‘Drone Hub’ by 2030, the new Drone Rules, 2021, attracts several investments from foreign companies as well as is liberalized enough to promote companies engaged in this business. The new rules have widened the scope and applicability of drones in India. It has not only winnowed several licenses and arcane certifications but has also empowered the educational as well as the research sector to use drones for various academic purposes. Taking into consideration the need to balance out the security and growth in this sector, the government has also laid down provisions that necessarily limit the usage of commercial drones in matters where it could possibly be detrimental to the security and integrity of India. The transgression of drones from merely an innovative technology to being a must-have technology has been foundational in the realization of its growth in India. The new Drone Rules, 2021 will be a bellwether in reifying India’s vision and will mark a staggering bloom for the companies engaged in the businesses of drones.

Impact of Drone Rules, 2021 on Companies
According to various reports, there are about 150-300 companies and MSMEs engaged in the production and usage of drones in India. News with regard to the usage of drone taxis is also doing rounds and is quite imminent. As per the research outlined by the Bureau of Indian Standards (BIS) drone market in India is expected to reach $1.21 billion (Rs. 8,911 crores) in Cy 2021. It will probably touch $ 1.81 billion i.e., Rs 13, 330 crores by the Fiscal year 2026 growing at a compound annual growth rate (CAGR) of 14.61 percent. This augurs growth in India and promotes a conducive environment for businesses that want to invest in this area.

The drone application in the forthcoming days will be well ensured in the areas of transportation, logistics, defense, mining, infrastructure sectors, and more, which will endow citizens with ample job opportunities.

Advantages of the new Drone Rules of 2021 upon the Indian Corporations
Will help New Start-Ups to Use New Technologies:
The new Drone Rules, 2021 are predicated on the concepts of speculations. Hence businesses and start-ups, who are willing to invest in this area will be considered as the vanguards of change for the drone ecosystem. With limited licenses and certifications, the rules facilitate larger investment opportunities with positive returns in the guarantee. The process, regarding registration as well as the use of drones, has been significantly simplified thereby contributing to the growth in this sector. Therefore, the legislation attracts upcomers and established businesses to diversify their interests in commercial purposes, which will be lucrative in the upcoming years as India now envisions a categorical growth in the drone arena.

The new Rules Attract Major Investment both Domestically and Internationally: The new liberalized Drone Rules, 2021 are considered as the catalyst for growth and investments, which will put domestic manufactures on a higher pedestal. Adjusting to the new rules, the ministry of civil aviation has recently proposed a production-linked incentive scheme for drones and drone components. Together with both propositions, it is slated to attract an investment of over Rs. 5,000 crores in the next 3 years. The PLI scheme has allocated Rs 120 crore for drones and drone components. In addition to this, manufacturers of drones and drone components will be provided with 20% of value addition as an incentive, to encourage their contributions to the drone ecosystem. The PLI rate will be at 20% for the three years, which is an exceptionally remarkable feature, only granted for the drone industry. For micro, small and medium enterprises and start-ups, the government has kept the eligibility norm in terms of annual sales turnover at Rs 2 crore for drones and Rs 50 lakhs for drone components. Similarly, for non-MSME companies, the annual sales turnover has been kept at Rs 4 crore for drones and Rs 1 crore for drone components, respectively. Further, the scheme covers, variety of drone components such as airframe, propulsion, communication systems, inertial system unit, detect and avoid systems, etc which inadvertently encourages businesses and start-ups to invest and manufacture in the drone components sector as well. In toto, the new rules will be definitive and significant for the domestic manufacturers. It furthers the interest of companies and businesses engaged in this area and engenders a lucrative environment for growth and development for start-ups and MSME. Amalgamated with the PLI scheme, the new Drone Rules, 2021 will bolster domestic manufacturers in multifarious ways and shall promote job opportunities in the manifold.

The new Rules Promote Multiple Areas for Investment: Erstwhile the law, with regard to the use of drones in India was severely restrictive in nature. Therefore, the growth in this sector was dwindling and limited. A little while ago, with recognition of the increasing usage of drone technologies, the focus on this sector has been in copious amounts. As a result, the usage of drones in the near future is considered to be absolutely indispensable. In pursuance of the same, drones have been granted a green light for profuse commercial purposes. From its varied utility in the agriculture sector to its envisioning utility as taxis, there marks a foundational transgression in the achievement of this technology. India is inviting investments in the areas of drones and drone components. This implies that businesses, start-ups as well as companies engaged in the production of drone components will also be provided with robust leverage. Further, MSMEs and Non-MSME and start-ups can expand their areas of interest for commercial purposes. At this juncture, drones are being profusely used in almost all sectors of investment. Hence, in anticipation of the required growth, businesses can use this opportunity to expand as well as establish a settled business in different sectors of the economy (such as transportation, cinema, education, deliveries, mining, etc) as there is no receding back and investments are rhetorically encouraged.

Huge Incentives and Nominal Fee: Lucrative incentive opportunities and a nominal fee are definitely a yardstick for accelerated growth for companies intending to engage in this area. The Drone Rules, 2021, has ideally winnowed down the fees for registration as well as for obtaining licenses. With this, start-ups and MSME; s will get a massive boost and encouragement to establish their business in this area. Further, the PLI scheme is essentially rewarding in terms of greater incentives which together creates a benchmark situation for the drone ecosystem in India. The government with the implementation of the new Drone Rules, 2021 provides enough strength and succor to companies to be at the fore of success and helps in the economic establishment of a business. If investing in an informed and sound manner, MSMEs, start-up’s and non- MSME’s can thrive immensely in the drone market with lucrative results.

The new Drone Rules, 2021 is an immaculate development in the arena of law and economy that would necessarily promote greater investments and will multiply job opportunities in India. It is meteoric legislation that is pro investors and must be used voraciously for the growth and development of one’s establishment. Assuring the requirements and due diligence is a prior condition for manufacturing drones in India and must be sincerely observed to reap productional benefits.
Authored By: Adv. Anant Sharma & Anchita Saxena

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