India's drone sector is witnessing rapid growth, driven by increasing demand from defence, agriculture, logistics, surveillance and industrial applications. However, while drone assembly has expanded significantly, indigenous manufacturing of critical subcomponents remains a major challenge. In an interview with BW Businessworld, Pankaj Akula, Group Managing Director of AKSI Aerospace, discusses the need for deeper indigenisation, supply-chain security, government support, and why a Design Linked Incentive (DLI) scheme could transform India's drone ecosystem. Excerpts:
India's drone sector has grown rapidly over the past few years. How do you view the current landscape, and where does AKSI Aerospace fit into it?
The importance of drones has become evident from the geopolitical developments we are witnessing globally. Whether it is the Russia-Ukraine conflict, tensions in West Asia, developments in the Red Sea, or regional security concerns closer to home, drones have emerged as a critical technology.
Demand is growing at an unprecedented pace. The United States is expected to procure tens of billions of dollars worth of drones over the next 12 to 18 months. In India as well, the defence sector is preparing for large-scale procurement of military drones.
However, the real challenge is not drone assembly. The missing link is indigenous manufacturing of critical subsystems. India today has hundreds of drone companies, but only a small number are manufacturing core components domestically. Most players continue to rely on imported subsystems.
At AKSI Aerospace, we are focused on building these capabilities within India. Our emphasis is on developing and manufacturing key drone components, investing in research and development, and creating intellectual property that contributes to true technological self-reliance.
How prepared is India to sustain the growth of its drone industry through indigenous manufacturing?
India has made significant progress in creating demand across sectors such as defence, agriculture, mapping, surveillance, logistics and infrastructure inspection. Government initiatives, including the Drone Rules, the Production-Linked Incentive (PLI) scheme and the broader Make in India programme, have provided momentum to the industry.
However, creating demand and building manufacturing depth are two different things.
India is reasonably strong in drone assembly, systems integration and software applications. The larger challenge lies in developing indigenous capabilities across critical subsystems such as autopilots, avionics, propulsion systems, smart batteries, communication systems, sensors, composite airframes and embedded electronics.
The next phase of India's drone growth will depend not on how many drones are assembled, but on how much of the underlying technology is designed, engineered and manufactured within the country.
Does AKSI Aerospace currently manufacture fully indigenous drones?
Achieving 100 per cent indigenisation is not realistic at this stage. Even advanced economies continue to depend on global supply chains for certain technologies.
Our goal is to reach around 85-90 per cent indigenisation over time. Today, we are at roughly 55-60 per cent. Some critical technologies, especially semiconductor-related components, integrated circuits and certain battery technologies, are still not available domestically.
India currently lacks a complete semiconductor ecosystem and large-scale lithium-cell manufacturing capability. Therefore, while complete indigenisation may not be possible immediately, reaching 85 per cent indigenous content is a realistic and achievable objective.
Which components are most critical for India to indigenise?
The most important components are the flight control system, communication systems and sensors.
The flight control system is effectively the brain of the drone. Communication systems ensure secure transmission of data and operational control. Sensors are essential for mission performance and situational awareness.
Beyond cybersecurity concerns, supply-chain security is equally important. If geopolitical tensions escalate and exports of critical drone components are restricted, manufacturers dependent on imports could face severe disruptions.
Therefore, indigenisation is not just about preventing data theft. It is about ensuring national security, operational readiness and supply-chain resilience.
How serious are the risks associated with imported drone components?
The risks are both strategic and operational. For defence applications, dependence on imported flight controllers, navigation systems, communication modules or power systems can compromise mission assurance and long-term reliability. It can also expose users to cybersecurity vulnerabilities and supply disruptions.
In civilian applications, imported components increase costs, affect maintenance cycles and limit scalability. The absence of even a single imported component can disrupt an entire production line.
Recent global conflicts have demonstrated that drones are no longer peripheral technologies. They are becoming central to warfare, homeland security, industrial automation and critical infrastructure management. India cannot build long-term drone capabilities solely through assembly operations.
How does AKSI Aerospace's manufacturing strategy differ from those of many other drone companies?
Many drone companies begin with a specific application, such as surveillance, spraying, or logistics, and then integrate imported subsystems into their platforms.
AKSI Aerospace follows a manufacturing-first approach. We believe India must build the industrial backbone supporting the drone sector.
This involves investments in composite structures, aerostructures, CNC machining, smart batteries, autopilot systems, production tooling, testing infrastructure and quality processes. Our objective is to create a vertically integrated ecosystem encompassing design, manufacturing, testing, assembly and lifecycle support.
This approach is essential if India wants to become a globally competitive drone manufacturing and export hub.
The Indian government is expected to place large drone procurement orders. How will such orders impact domestic manufacturers?
Large procurement programmes are certainly positive for the industry and will help create scale. However, procurement alone is not enough. India must also support indigenous component development and original technology creation.
If large contracts primarily benefit assembly operations based on imported technologies, the country will miss an opportunity to build strategic capabilities. Alongside procurement, there must be dedicated support for research and development and domestic component manufacturing.
The long-term objective should be to create drones that are substantially designed and manufactured in India rather than merely assembled here.
How do you view India's future in military and kamikaze drones?
The lessons from recent conflicts have shown that loitering munitions and kamikaze drones are becoming indispensable elements of modern warfare.
India has the potential to emerge as a leading global player in this segment. The country possesses strong engineering talent, an expanding defence ecosystem and increasing operational experience.
However, achieving global competitiveness will require sustained investment in research and development across platforms, ammunition systems and critical subsystems. Our ambition is to see Indian companies competing globally against established aerospace and defence players with indigenous technologies.
What policy interventions are needed to accelerate India's drone manufacturing ecosystem?
The next phase of policy support should focus on indigenous subcomponents rather than only finished drone platforms.
India needs stronger incentives for autopilots, avionics, propulsion systems, RF modules, sensors, batteries, embedded electronics and aerospace-grade composites. The country also requires improved testing and certification infrastructure, faster regulatory approvals and greater access to R&D funding.
One particularly important reform would be introducing a Design Linked Incentive (DLI) scheme for the drone sector.
How would a Design Linked Incentive scheme help the industry?
The electronics and semiconductor sectors already benefit from Design Linked Incentives, which reward companies for creating intellectual property and indigenous designs.
In semiconductors, companies that develop chip designs and own intellectual property receive incentives because design is recognised as a critical component of technological leadership.
The drone sector currently lacks a similar framework. Before supporting manufacturing at scale, there must be support for design and innovation. If a DLI programme is introduced for drone subcomponents and critical technologies, it could significantly accelerate India's technological advancement.
In my view, a well-designed DLI programme could place India years ahead of many competing countries in drone technology development.
Is the company also targeting international markets?
Yes. We are already executing multi-year, multi-million-dollar contracts for European customers and supplying systems across international markets.
These engagements cover surveillance and ISR (Intelligence, Surveillance and Reconnaissance) platforms, along with various drone-related technologies. We expect additional international contracts in the near future.
Exports are an important validation of technological capability. Our long-term objective is to establish AKSI Aerospace as a globally competitive drone technology company capable of serving international defence and commercial markets.
What are AKSI Aerospace's expansion plans and long-term vision?
We already operate a large manufacturing facility and continue to expand our capabilities across the drone ecosystem. Our focus spans military drones, agricultural drones, cargo drones and commercial UAV platforms. We are also developing larger cargo drones with payload capacities ranging from 50 kg to 200 kg, while simultaneously working on passenger-carrying drone technologies.
Beyond platforms, we are strengthening our capabilities in composite structures, smart battery systems, flight control systems and advanced manufacturing processes to deepen indigenous value addition across the supply chain.
Our long-term ambition is to become one of India's leading drone technology companies built on indigenous innovation and manufacturing excellence. We already have a strong order book and healthy business fundamentals, and our goal is to become the fastest drone company in India to reach Rs 1,000 crore in revenue.
More importantly, we want to contribute to India's emergence as a global hub for unmanned systems, aerospace manufacturing and next-generation autonomous technologies, while competing with global players through products designed, developed and manufactured in India. |
