Fuelled by India’s aim to become the global drone hub by 2030, domestic unmanned aerial vehicle (UAV) manufacturers are setting their sights on international markets. Among these is ideaForge, a maker of surveillance drones for the defence sector, which recently announced its expansion to the United States (US). In a conversation with Aggam Walia, Vishal Saxena, Vice President, Business Development at the Mumbai-based company, talked about the nuances of the US market, the degree of indigenisation in the UAV supply chain, and the Production-Linked Incentive (PLI) scheme for drones. Edited excerpts:
ideaForge has recently announced its entry into the US market. Can you explain the supply-demand dynamics behind this move?
From the demand side, we look at any country which has got a large landmass and a reputable use case. Most countries have reputable use cases where drones are not used as a one-off service but for a continuous period. The US has a large landmass, is friendly to foreign technology, technology adoption is very high, and language is not a barrier. If you put some of those filters, from a demand perspective, that country or that geography stands out. So does Australia and a couple of others.
If you’re going out of India, which is right now the best market in terms of the sheer size and volume, you have to look at the entire geopolitical scenario. The market, especially some of the products which we are in, is right now with the Chinese. Obviously, the Chinese are not the flavour of the century, so there is an opportunity to go there with the kind of offerings we have. The Chinese overhang which has been there in that market has been withering away. From the supply side of the house, we have honed our skills in this diverse and harsh Indian environment.
Our technologies are now fit enough to go outside of India, having tested it in harsh environments from the Himalayas to the Thar desert. If you can be successful in this geography, both in terms of technology and business model, we are confident that we will be fairly successful outside.
How is the regulatory ecosystem different between the two markets, if at all?
We’re not leading with our entire portfolio there, just two products– Switch and Netra V4 Pro. We have not launched Netra V4 Pro in the Indian market yet because of the kind of technology it uses and people may not have the wherewithal to test it. Most of the products have to be certified by the Directorate General of Civil Aviation (DGCA) and I don’t think I will get a Bureau of Indian Standards (BIS) certificate for some of those components because they are state of the art and by the time the regulations adapt, I can’t be going against the law of the land. So I will not use those technologies here, I’ll probably use that technology in the US.
It’s a known fact in the tech sector that the regulations or the government is following and the technology is leading. Those are some of the nuances of each market.
In terms of product features, will there be any tweaks for the US market?
We would have done about half a million flights here in India and why it makes us special is because we would have encountered at least 95 per cent of the corner cases in terms of technology, environment, and user expectations. We have technology built in for that so you don’t find a lot of surprises in India. But now when we are flying with our customers in the US, there are some surprises which we are finding not because there is a deficiency in technology but they have completely different user expectations.
In India, people are happy for UAVs to fly on their own but in the US, people want to really be in control. So that’s a shift on the user behaviour perspective. We are learning to adopt, so there will be versions which could be very useful in the US but may not be very useful here. Secondly, everything is very process-oriented in the US. If rules say you should not be flying above 100 metres, no matter what they will not fly above that limit. Here, the user does not want that clamping. So that’s a difference and you start tweaking your software and hardware to comply with that user and regulatory environment.
To what extent is the UAV supply chain indigenised?
A lot of indigenization is happening and we are working with our downstream suppliers to do that. Alternatives are coming up fast but there are certain areas like chips, we don’t make that and most of it gets imported.
The only distinction we’ll make is, because of the nature of products and our customers, is coming from authorised or non-China sources. Nobody makes lenses in India so you’re working with top notch players like Sony or Flir. I think that alternative is still not there and while we see some people coming up with that quality and reliability, we’re not finding it. There’s a lot of areas where we’re finding suppliers and kind of hand holding them and indirectly investing in them so that they come up with products.
How do you see the PLI scheme for drones going forward?
The PLI has been a good scheme– we’re beneficiaries of it so we can probably say that it’s a good scheme. We are also requesting through various forum bodies for it to be expanded for those people who were left behind for whatever reason. There should be a continuous evaluation of firms so that if somebody was not able to qualify last year, they should not be excluded this year. Secondly, we can include even more technologies. There are some downstream suppliers who are beneficiaries of the PLI. I think that can also be expanded because things are happening at a much faster pace than we envisioned and it’s a good sign. Thirdly, maybe also look at ancillary industries. Maybe an anti-drone firm can also qualify because they by and large have the same skill set. As drones will proliferate, so will anti-drone technologies.
