India’s Defence Drone Industry Gains Momentum, But Regulatory Challenges Persist
India’s defence drone sector took centre stage following the recent tensions between India and Pakistan. The successful deployment of indigenously developed drones during ‘Operation Sindoor’ to neutralise terror networks underscored their strategic importance. However, the sector continues to face hurdles, including regulatory ambiguity, import restrictions, and limits on technology transfer, said retired Major General Mandip Singh, in an email interview with AIM. He’s also the president of strategic alliance at Droneacharya Aerial Innovation Ltd. Singh pointed to government initiatives like the Make in India campaign, the Atmanirbhar Bharat mission, and regulatory frameworks, such as the Drone Rules 2021 and the Defence Production and Export Promotion Policy (DPEPP) 2020, as gradually creating a more conducive environment for Indigenous manufacturers and encouraging local production and innovation. “Further policy support is needed for R&D, skilling of our vast human resource, ease of procurement processes, and recognition for indigenous content,” he added. According to a Grand View Research report, India’s military drone market is projected to reach $4,082 million by 2030, growing at a compound annual growth rate (CAGR) of 17.9% from 2025 to 2030. As of 2024, India holds a 3.8% share of the global military drone market. Lessons from Indo-Pak border tensions The recent border clashes underscored the critical role of drones in surveillance, situational awareness, and rapid response, Singh said. “For startups, this reaffirms the need to focus on reliable, high-performance drones that can operate in challenging terrain and provide real-time intelligence,” Singh said.  “It reminds them that the future of modern warfare is increasingly reliant on cutting-edge drone technology.” Another key takeaway is the imperative for indigenous equipment and domestic supply chains—no nation can afford reliance on external sources during conflict. Since the tensions, Droneacharya has accelerated the integration of artificial intelligence into its projects. “Intelligent drones with lethal precision neutralised enemy targets with zero collateral damage in this brief skirmish. This is set to become the new standard,” Singh noted. Counter-drone solutions Addressing the rising demand for counter-drone systems, Singh said startups are innovating rapidly to meet defence requirements. “This includes early detection, jamming, and neutralisation systems to secure critical airspace,” he said. With the Atmanirbhar Bharat and Make in India programmes, the industry is increasingly leveraging locally sourced components and indigenous manufacturing, aligning with the government’s push for a robust domestic defence ecosystem. Singh also warned that India’s northern neighbour remains the world’s largest producer, seller, and user of dual-use drones, which serve both commercial and military purposes. R&D and strategic partnerships India’s push for indigenous drone capabilities dates back to the 1990s with DRDO’s early UAV projects. National campaigns and updated regulations have since accelerated sector growth. “Drones can be significant job creators and economic growth drivers,” the Ministry of Civil Aviation noted in 2021, adding that India has the potential to become a global drone hub by 2030. The Drone Rules 2021 also proposed establishing a Drone Promotion Council, which would bring together academia, startups, and stakeholders to foster an innovation-friendly regulatory environment. Singh revealed that the Droneacharya’s R&D efforts are focused on enhancing drone durability, range, and real-time data processing, alongside AI and machine learning integration for precise threat detection. The company is also developing heavy-lifting drones and logistics drones. DroneAcharya is actively exploring partnerships with both domestic and global technology leaders to strengthen capabilities and co-develop advanced defence-grade drones that align with the government’s Make in India initiative and address emerging security threats to international standards. When asked about investor interest following the border tensions, Singh said the situation has sparked renewed focus on defence technologies and mission-critical drones, positively impacting investor sentiment. “We hope this momentum leads to policy reforms that incentivise MSMEs and SMEs to contribute to building a resilient drone ecosystem,” he concluded.
India’s military drone market is projected to reach $4,082 million by 2030, growing at a compound annual growth rate (CAGR) of 17.9% from 2025 to 2030.
India’s military drone market is projected to reach $4,082 million by 2030, growing at a compound annual growth rate (CAGR) of 17.9% from 2025 to 2030.
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["Go", "API", "machine learning", "artificial intelligence", "AI", "innovation", "RAG", "Aim", "R", "startup"]
["AI", "artificial intelligence", "machine learning", "Aim", "RAG", "R", "Go", "API", "innovation", "startup"]
Bala is a journalist covering Indian tech companies and startups from Bengaluru.