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Rediff.com  » Business » Reliance sets its drone biz plan in motion

Reliance sets its drone biz plan in motion

By Surajeet Das Gupta
February 18, 2022 13:48 IST
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Reliance Industries has put together an aggressive plan to build its drone business which includes expanding manufacturing capacity five-fold, participating in the new drone production linked incentive scheme, and experimenting with limited logistics payloads to deliver goods.

The target is to become a key player in the expected $5 billion market in India by the end of the decade.

The drone business is being carried out through a Bangalore-based start up, Asteria Aerospace, in which Reliance has taken a majority stake.

 

Asteria is a subsidiary of Jio Platforms Ltd.

Neel Mehta, co-founder of Asteria, has an upbeat assessment of the global and Indian drone market.

“In the next two years, we expect the global drone market (excluding large military drones) will be $20 billion and the Indian market will be around $1 billion, up from the current $200 million, which will be about 4-5 per cent of the global pie.

"This will go up to $5 billion by the end of the decade. We plan to get a significant share of this market,” he said.

Mehta says that with the government opening up the commercial drone sector in 2018 by lifting the earlier ban, the ratio between military and commercial drones will flip from 70:30 to 30:70 within the next two years.

Asteria estimates that there will be over 50,000-60,000 commercial drones in the skies in two years in India and the company will invest to expand its capacity in the Bangalore plant from 2,000 per annum to 10,000 drones very soon.

However, he points out that, for Asteria, drone hardware will account for only 30 per cent of its revenues.

It is drone as a service business which will account for the rest.

This includes providing end-to-end solutions for companies that encompass managing and running the drone, collecting data and analysing it, and offering the service on a single platform to the client.

Mehta says Astoria will participate in the drone Production Linked Incentive (PLI) scheme which has been announced by the government with a corpus of Rs 120 crore to incentivise the sector.

“We will surely take advantage of the PLI scheme and our assessment is that the Rs 120 crore will be used up in just two years,” said Mehta.

In the commercial space, Asteria is operating in many areas where Reliance is a large player such as oil and gas pipelines where increasingly surveillance and maintenance are being undertaken by drones which are replacing helicopters and manned security.

In telecom, drones have helped Reliance Jio maintain telecom towers and survey potential new tower locations.

However, when it comes to last mile delivery through drones, Mehta believes it will take another five to six years for this to become a commercial reality.

“We don’t see regulation enabling it soon, as this means new ways of traffic management and resolving various safety concerns.

"And you cannot have so many drones in the sky,” he said.

Nevertheless, there are opportunities in logistics which are opening up, especially in healthcare drones with payloads of 5-10 kilos transporting critical medicines from one place to another, especially in mountainous terrains where moving goods by road is time-consuming. Mehta says Asteria is open to this opportunity and to building such drones.

He also says there is scope to use drones in middle mile logistics transportation from one hub to another. For this to work, though, it will require drones with flight paths of 200 kilometres and the ability to carry heavier payloads.

“Currently, what you have are military drones which cost $100 million for transportation logistics.

"Companies abroad are working to reduce costs and disrupt the market,” said Mehta.

Asteria’s drones have localisation levels for manufacturing of 60-65 per cent.

They share the supply chain with electric vehicle and mobile device component makers as there is a lot of synergy among them in the areas of batteries, electric motors, and camera modules.

Photograph: Courtesy Asteria Aerospace

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Surajeet Das Gupta in New Delhi
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