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Mint
2 days ago
- Business
- Mint
India's drone industry grows rapidly but faces critical rare-earth magnet dependency
Sakshi Sadashiv India is swiftly expanding its drone manufacturing ecosystem, driven by increased defence demands, supportive government policies, and a burgeoning startup scene. The motors used in drones are made from rare-earth magnets, typically smaller brushless DC motors. Gift this article India's drone ecosystem is ramping up local manufacturing amid rising defence demand and policy push, and a swelling base of domestic startups. While there's growing domestic capability in airframes, batteries, and software, critical components such as flight controllers, sensors, and motors continue to be largely import-dependent. India's drone ecosystem is ramping up local manufacturing amid rising defence demand and policy push, and a swelling base of domestic startups. While there's growing domestic capability in airframes, batteries, and software, critical components such as flight controllers, sensors, and motors continue to be largely import-dependent. A key vulnerability lies in the reliance on rare earth magnets—essential for high-performance drone motors, which India currently lacks the capacity to produce at scale, industry executives said. With China tightening export controls on these magnets, especially for defence applications, industry executives warn this could become a bottleneck in India's goal of building a fully self-reliant drone manufacturing ecosystem. The motors used in drones are made from rare-earth magnets, typically smaller brushless DC motors. 'There are ongoing efforts to identify alternative options—both in terms of materials and designs—and to determine what can be used in place of Chinese-sourced rare earth magnets," said Sai Pattabiram, founder and MD of Zuppa, a drone-tech startup. Garuda Aerospace invested in the company this year, and it is also backed by MapmyIndia. Government support Currently, India is home to 515 drone-related companies, with 263 focused specifically on component manufacturing. In terms of funding, drone startups secured $108 million in 2024 and have already raised $39 million in 2025, according to Tracxn data. India is also set to roll out a $234 million incentive scheme aimed at boosting domestic production of drones for both civil and defence use, according to aReutersreport. Moreover, the production-linked incentive (PLI) scheme, along with initiatives like the defence ministry's iDEX and Technology Development Fund (TDF), has created a fertile ground for companies to invest in R&D and ramp up manufacturing. Drone companies interviewed by Mint echoed the sentiment that these schemes are not merely financial boosts, but strategic signals that India is committed to building a globally competitive drone ecosystem. Yet, India's reliance on foreign suppliers—particularly for magnets—has emerged as a serious issue. 'In India, most motors used in drones are permanent magnet motors, which rely on rare earth magnets. Unfortunately, there are currently no alternative suppliers for these magnets," said Srihari Mulgund, partner and New-Age Mobility leader, EY-Parthenon. 'There is currently no domestic source for drone-grade magnets in India. We need to start figuring this out, especially given the current situation," he said. With defence applications flagged by foreign suppliers, access to these critical parts becomes even harder. 'If the end use is defence-related, then suppliers—especially from China—won't ship the parts. That's a serious roadblock. You're essentially stuck if the supplier flags your application as defence," Mulgund added. In June, China issued six-month export licenses for select rare-earth materials following trade talks with the US, but continued to block exports of magnets intended for defence use, maintaining restrictions on military-grade components. 'Even automotive companies are struggling to secure these magnets—so how can drone companies expect to fare better?" Mulgund said. Rare-earth alternatives Currently, there is no viable recycling mechanism, and substituting with ferrite magnets or soft magnetic composites is not feasible, he added. These alternatives do not offer the same performance characteristics—such as magnetic strength, weight efficiency, or thermal stability—required for high-end drone applications. Moreover, manufacturers don't stock large inventories. 'Demand is relatively low, as drones aren't high-volume products; much of the production is order-driven. Companies typically receive an order first and then procure parts, operating largely on a just-in-time basis," Mulgund said. Substitutes like ferrite magnets and soft magnetic composites exist but offer significantly lower magnetic strength, making them unsuitable for drones that require compact, high-efficiency components, according to Mulgund. Yet investor appetite is evolving. As localisation deepens and strategic relevance grows, long-term capital is beginning to flow in. Recently, Raphe mPhibr raised $100 million, the largest fundraising effort in India's drone sector to date. However, CEO Vivek Mishra clarified that the funding isn't for a single product but will go toward expanding both R&D and manufacturing capacities—it is not tied to a specific product like drones. Also Read: How new rules may change your app-cab rides The startup started in 2017 with a modest 2,000-square-foot research space. Later, it scaled up to a 100,000 sq ft integrated research and manufacturing facility, which has now expanded to a 650,000 sq ft facility. The company serves over 10 Indian government clients, including the Army, Navy, Air Force, and armed police forces. Mishra said that the company has sold over 400 drones in the past 12 months alone. On the rare earth magnet front, Mishra said the company has been actively working with authorities and advocating for indigenous manufacturing. 'Things have been moving, but they've picked up pace over the last couple of months. We are now setting up local manufacturing for these magnets as well. For a few months, there might be certain problems—but it's solvable," he toldMint. Defence capabilities 'There's growing investment in drone manufacturing in India, but there's no magic bullet—you can't just pump in money and expect startups to suddenly make everything indigenous," said Pushkar Singh, co-founder of investment firm Tremis Capital. 'The government is now focusing on manufacturing simpler, less complex components locally, as making high-precision components requires machining expertise we currently lack." Less complex components—such as frames, casings, or basic assemblies—are easier and quicker to manufacture compared to high-precision components, which demand advanced machining skills, tighter tolerances, and specialised equipment India is still developing. He added that while Indian startups are unlikely to make missiles or tanks, drones represent a strategic sweet spot, especially with rising demand in modern warfare. 'Modern warfare is shifting towards drones. The government wants to reduce dependency and boost exports. Many smaller countries can't afford fighter jets or missiles, but they can afford drones. That creates massive export potential for Indian startups." Mumbai-based IdeaForge says it has already built a fully proprietary autopilot stack—meaning all flight control software and systems have been developed in-house, without using any third-party or open-source code. 'We have written the software for our autopilot from the ground up. The PCB (printed circuit board), which connects and powers key electronic components, is also our own design—and we ensure that microcontrollers (chips that control drone functions), don't come from geographies of concern (countries that may pose security or trade risks)," said Ankit Mehta, co-founder of IdeaForge. He added that, depending on the product, their drones are around 70% indigenously built. US, Europe, Japan, Australia, and India have already begun allocating significant resources to rebuild rare-earth supply chains and reduce their dependence on China. Australia's Lynas Rare Earths has ramped up production, while the US has designated rare earths as critical minerals and is channelling funding into domestic mining and refining. Globally, countries are also investing in recycling technologies to recover rare earths from electronic waste and advancing R&D to develop magnet alternatives and reduce overall rare-earth usage in high-tech applications. 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Time of India
23-06-2025
- Business
- Time of India
Tamil Nadu emerging as key contributor in manufacturing drones for the armed forces, and other electronic defence systems
The Union govt referred to Operation Sindoor, India's retaliatory strike to the Pahalgam terror attack, as a milestone in the nation's journey towards technological self-reliance in military operations — in drone warfare, layered air defence, and electronic warfare. The operation significantly boosted demand for drones manufactured by indigenous companies. Projections peg the size of the Indian drone market to hit $11 billion by 2030, accounting for 12.2% of the global drone market. The ban on imported drones and the launch of the PLI scheme for drones and drone components, notified by the Ministry of Civil Aviation on Sept 30, 2021, with a total incentive of ₹120 crore spread over three Financial Years (FYs), are laying the groundwork for India making huge strides in the drone ecosystem. Tamil Nadu is emerging as a key contributor in manufacturing drones for the armed forces, as well as building broader electronic defence systems, including UAV jammers and sophisticated payload delivery systems. The state has notable companies, both startups and veterans, such as Dhaksha, Garuda Aerospace, Zuppa Geo Navigation, ePlane company, Big Bang Boom, Data Patterns, all of which are building strategic UAVs and related technologies. Many of these firms, which had quietly developed defence-grade technologies over the years, are now seeing a surge in interest and keeping them busy with product demonstrations on field in crucial areas. Sai Pattabiram, founder and managing director of Zuppa, which is making small drones and autopilots, says they received 5X increase in order enquiries in the aftermath of Operation Sindoor. "The way drones were predominantly considered as a tool for surveillance has now changed," he said. Zuppa works closely with the ministry of defence and army units to develop systems suitable for the specific terrains and mission conditions. Garuda Aerospace, traditionally known for agricultural drones, is focussing on defence applications in recent months. "We are developing eight different drone platforms and collaborating with global players such as Lockheed Martin and Thales," said Agnishwar Jayaprakash, founder and CEO. "We have participated in emergency procurement rounds and held about 40 field demonstrations. Our focus now is to design based on ground-level operational needs and co-develop with defence forces." Tamil Nadu is not the only drone manufacturing hub in India. The drone ecosystem is spread in peninsular India, spanning Karnataka, Telangana, and Maharashtra, which benefit from the presence of public sector giants like HAL and DRDO. However, Tamil Nadu is attempting to close the gap. Since 2022, the state has ramped up its policy and infrastructure support for the sector. Wing Commander P Madhusoodhanan, vice president of Aerospace and Defence at TIDCO, and CEO of TN UAV corporation, said, "The drone industry is at an inflection point. With military procurement expanding, we expect greater scale and sustainability." The ministry of defence is setting up four UAV testing and certification facilities near Sriperumbudur, expected to be operational by year-end. He said that these centres are focused on unmanned systems, electronic warfare and electro-optics, among the few of their kind in India and will reduce the testing cost in the state and spearhead development. TN companies' role extends beyond making drones. Dr Shivaraman Ramaswamy, CTO of Big Bang Boom Solutions, which has artificial intelligence and EW capabilities, said demand for its anti-drone systems is rising. He further said the state has a suitable environment for manufacturing defence systems, with the advantage of using electronics manufacturing service and fabrication from engineering firms. The presence of one of the country's two defence corridors, expertise in auto, aerospace and electronics manufacturing, vibrant research by educational institutions such as MIT, IIT-M, huge capacity for training drone pilots and training the trainers puts TN in a sweet spot in defence drones. Yet, challenges persist. The lack of indigenous supply chains remains a concern. Executives TOI spoke to said the union govt should hold more consultation with the companies doing actual work and urged the state govt to facilitate consultation. Many press the need for handholding by armed forces in designing and developing the technologies as more important than subsidies.
Time of India
22-06-2025
- Business
- Time of India
Tamil Nadu emerging as key contributor in manufacturing drones for the armed forces, and other electronic defence systems
The Union govt referred to Operation Sindoor, India's retaliatory strike to the Pahalgam terror attack, as a milestone in the nation's journey towards technological self-reliance in military operations — in drone warfare, layered air defence, and electronic warfare. The operation significantly boosted demand for drones manufactured by indigenous companies. Projections peg the size of the Indian drone market to hit $11 billion by 2030, accounting for 12.2% of the global drone market. The ban on imported drones and the launch of the PLI scheme for drones and drone components, notified by the Ministry of Civil Aviation on Sept 30, 2021, with a total incentive of Rs 120 crore spread over three Financial Years (FYs), are laying the groundwork for India making huge strides in the drone ecosystem. Tamil Nadu is emerging as a key contributor in manufacturing drones for the armed forces, as well as building broader electronic defence systems, including UAV jammers and sophisticated payload delivery systems. The state has notable companies, both startups and veterans, such as Dhaksha, Garuda Aerospace, Zuppa Geo Navigation, ePlane company, Big Bang Boom, Data Patterns, all of which are building strategic UAVs and related technologies. Many of these firms, which had quietly developed defence-grade technologies over the years, are now seeing a surge in interest and keeping them busy with product demonstrations on field in crucial areas. Sai Pattabiram, founder and managing director of Zuppa, which is making small drones and autopilots, says they received 5X increase in order enquiries in the aftermath of Operation Sindoor. "The way drones were predominantly considered as a tool for surveillance has now changed," he said. Zuppa works closely with the ministry of defence and army units to develop systems suitable for the specific terrains and mission conditions. Garuda Aerospace, traditionally known for agricultural drones, is focussing on defence applications in recent months. "We are developing eight different drone platforms and collaborating with global players such as Lockheed Martin and Thales," said Agnishwar Jayaprakash, founder and CEO. "We have participated in emergency procurement rounds and held about 40 field demonstrations. Our focus now is to design based on ground-level operational needs and co-develop with defence forces. " Tamil Nadu is not the only drone manufacturing hub in India. The drone ecosystem is spread in peninsular India, spanning Karnataka, Telangana, and Maharashtra, which benefit from the presence of public sector giants like HAL and DRDO. However, Tamil Nadu is attempting to close the gap. Since 2022, the state has ramped up its policy and infrastructure support for the sector. Wing Commander P Madhusoodhanan, vice president of Aerospace and Defence at TIDCO, and CEO of TN UAV corporation, said, "The drone industry is at an inflection point. With military procurement expanding, we expect greater scale and sustainability." The ministry of defence is setting up four UAV testing and certification facilities near Sriperumbudur, expected to be operational by year-end. He said that these centres are focused on unmanned systems, electronic warfare and electro-optics, among the few of their kind in India and will reduce the testing cost in the state and spearhead development. TN companies' role extends beyond making drones. Dr Shivaraman Ramaswamy, CTO of Big Bang Boom Solutions, which has artificial intelligence and EW capabilities, said demand for its anti-drone systems is rising. He further said the state has a suitable environment for manufacturing defence systems, with the advantage of using electronics manufacturing service and fabrication from engineering firms. The presence of one of the country's two defence corridors, expertise in auto, aerospace and electronics manufacturing, vibrant research by educational institutions such as MIT, IIT-M, huge capacity for training drone pilots and training the trainers puts TN in a sweet spot in defence drones. Yet, challenges persist. The lack of indigenous supply chains remains a concern. Executives TOI spoke to said the union govt should hold more consultation with the companies doing actual work and urged the state govt to facilitate consultation. Many press the need for handholding by armed forces in designing and developing the technologies as more important than subsidies.
New Indian Express
19-06-2025
- New Indian Express
Indian Army sets up drone MRO lab in tie-up with Chennai firm Zuppa
CHENNAI: In line with Army Chief Gen Upendra Dwivedi's vision to equip every soldier with a drone, the Dakshin Bharat Area has set up a dedicated drone MRO lab at the Madras Regimental Centre, Wellington, in partnership with Chennai-based Zuppa. The initiative marks a strategic shift in the military's approach to unmanned aerial systems (UAS), placing greater emphasis not only on frontline drone deployment but also on in-theatre repair, diagnostics, and self-reliance. The effort follows lessons drawn from Operation Sindoor. The operation underscored the urgent need for Indian soldiers not only to operate drones but to independently maintain and troubleshoot them during active conflict scenarios. 'The real challenge in drone warfare isn't just flying them - it's understanding their inner workings, especially how high electromagnetic fields can disrupt sensitive sensors,' said Sai Pattabiram, founder and managing director of Zuppa. 'The MRO lab is designed as a scalable, hands-on ecosystem to bridge that knowledge gap.' The MRO lab is the result of a series of technical consultations between Lieutenant General Karanbir Brar, General Officer Commanding, Dakshin Bharat Area, and Zuppa's engineering team. The project includes DGCA-certified drone pilot training, to be delivered in collaboration with Tamil Nadu Unmanned Aerial Vehicles Corporation (TNUAV), and is underpinned by a Memorandum of Understanding signed between Zuppa and the Army's Madras Regimental Centre.
New Indian Express
11-05-2025
- Business
- New Indian Express
Tactile drone made by Chennai company gets Indian Army's field-level validation
CHENNAI: A micro-category surveillance drone developed by a Chennai-based company has received the nod from the Indian Army, marking a potential inflection point in India's ambitions to build a sovereign defence technology ecosystem and reduce its reliance on import from other foreign entities. Zuppa Geo Navigation Technologies, a Chennai-based firm, has secured field-level validation for its Ajeet Mini drone- a compact tactical unmanned aerial vehicle (UAV) designed for reconnaissance missions. The Army's endorsement came after field trials conducted earlier this week by a Mountain Brigade operating in high-altitude terrain, where the drone met key performance parameters. The Army's validation is not a procurement contract but is believed to be a crucial first step, providing Zuppa with access to further trials, and a possible entry into a strategic procurement pipeline in the coming years. The Ajeet Mini is built around Zuppa's proprietary patented autopilot system and features a domestically developed cyber-physical stack, including in-house firmware, command protocols, and ground control software. 'We've developed the entire stack ourselves- hardware, software, structural components, and the control systems,' said company founder Sai Pattabiram. On the day prior to the announcement, Indian forces intercepted a coordinated drone swarm believed to be launched by Pakistan across the LOC near Jammu. Pattabiram said that Zuppa's SWARM platform offers potential for 'deep penetration' missions across adverse borders without the risks associated with manned sorties. Analysts say the domestic demand for drones- spanning defence, agriculture, and logistics- could create a fertile environment for globally competitive innovation, provided policy support and procurement pipelines remain robust. 'Drone manufacturing will evolve in distinct clusters, driven by domestic volume,' Pattabiram added.
