LEGAL REQUIREMENTS FOR THE MANUFACTURING OF DRONES IN INDIA

Introduction  
In June 2020, the Indian Ministry Of Civil Aviation (MoCA) released the draft rules on Unmanned
Aircraft Systems (UAS/drones) for public comments. Nine months later, in March 2021, the MoCA
notified the final Unmanned Aircraft System Rules, 2021 (UAS Rules, 2021) as a result of which the
earlier Drone Regulations of December 2018 stand superseded. 

Laws regulating drones in India  

Unlike the earlier guidelines, the UAS Rules, 2021 have now been extended to all the UAS registered
in India, regardless of the fact whether or not they are operating outside the Indian territory. Its
provisions would also apply to all persons who wish to own or possess, or look forward to engaging in
activities of importing, exporting, manufacturing, trading, operating, leasing, maintaining, or
transferring a UAS in India. Further, as per the new rules, all traders, manufacturers, importers,
owners, and operators of Unmanned Aircraft Systems will require formal authorization certificates
from the Director-General of Civil Aviation (DGCA). Manufacturers and importers can obtain this
certificate by paying a fee of INR 10,000. 

Besides the new UAS Rules, 2021, manufacturing of drones in India is governed by multiple laws
which include: Aircraft Act, 1934, Indian Wireless Telegraphy Act, 1933, Indian Telegraph Act, 1885,
and Sea Customs Act, 1878 (as adopted by the Customs Act, 1962).

Key highlights of UAS Rules, 2021  

 UAS are classified as aeroplanes, rotorcraft, and hybrids, with remotely piloted aircraft, model
remotely piloted aircraft, and autonomous unmanned aircraft systems as subcategories.
 Nano, micro, small, medium, and large unmanned aircraft are categorized based on their
maximum all-up weight, including payload, which ranges from 250 grams to 150 kilograms. If
the performance parameters of flying speed and height are exceeded, nano UAS can be
categorized in the next higher category.
 To import, manufacture, trade, own, or operate drones, individuals and businesses must first
acquire a license from the DGCA.
 No Permission-No Take-off (NPNT) policy adopted for all UAS except for those in the nano
category.
 Micro and small UAS are not permitted from flying above 60m and 120 m, respectively.
 Except for the micro category, every UAS must have flash anti-collision strobe lights, flight data
logging capability, a secondary surveillance radar transponder, a real-time tracking system,
and a 360-degree collision avoidance system, among other features.
 All UAS, including those in the micro category, must have a Global Navigation Satellite
System, an Autonomous Flight Termination System or Return to the Home option,
geofencing capability, and a flight controller, among other features.
 UAS are restricted from flying in strategic and sensitive regions, such as near airports, defense
airports, border areas, military installations/facilities, and areas designated by the Ministry of
Home Affairs as strategic locations/vital installations.
 Nano, micro, and small UAS activities are restricted to visual line of sight and are not permitted
to deliver goods.
  Medium and large UAS are allowed to deliver cargo.
 Only after getting a license from the DGCA are research and development (R&D)
organizations, including start-ups, authorized UAS manufacturers, and any certified
recognized institution of higher education situated in India, permitted to conduct UAS R&D.
 Individual penalties range from Rs 10,000 to Rs 1,00,000, while organizations face fines of
200, 300, or 400 per cent of the sum indicated for individuals, depending on the size of the
organization.

Requirements to be met for manufacturing  

Manufacturing and operating drones is a complex task and hence, there are certain requirements and
quality checks that the manufacturing process needs to undergo in order to qualify for the lawful
operation. 

Prerequisites for setting up a drone manufacturing business in India   

In case a person wishes to own, operate, or manufacture drones in India, he must ensure that his
company meets the following requirements:

 The company must be registered and have its principal place of business in India.
 The Chairman and at least two-thirds of the company’s directors must be citizens of India. 
Foreign drone companies or their majority/wholly-owned Indian subsidiaries cannot legally own or
operate drones in India since they do not qualify to apply for authorization to the DGCA.

Classification of Unmanned Aircraft System   

The Indian Government has classified drones according to their maximum weight (including payload).
The UAS has been divided into the following five categories:

1. Nano unmanned aircraft: Less than or equal to 250 grams (with its maximum speed not
exceeding 15 mt/s);
2. Micro unmanned aircraft: Greater than 250 grams and less than or equal to 2 kilograms;
3. Small unmanned aircraft: Greater than 2 kilograms and less than or equal to 25 kilograms;
4. Medium unmanned aircraft: Greater than 25 kilograms and less than or equal to 150
kilograms; and
5. Large unmanned aircraft: Greater than 150 kilograms.
Every category of a drone must obtain a valid certificate of manufacturing and airworthiness from the
DGCA irrespective of the category, only then shall the drone be allowed to operate in India. 

Mandatory parts and components for manufacturing and flying drones in India   
In order to obtain  a certificate of manufacturing and airworthiness from the DGCA, every drone must
be equipped with the following parts and features:

 Global Navigation Satellite System (GNSS) receiver(s) for horizontal and vertical position
fixing;
 Autonomous Flight Termination System or Return To Home (RTH) option;
 Geo-fencing capability;
  Flashing anti-collision strobe lights;
 Flight controller;
 Reliable Command and Control Link;
 Real-time tracking system;
 Barometric equipment with capability for remote subscale setting;
 Detect and Avoid (if intended to operate beyond 400 feet/120 m AGL);
 Manufacturer Serial Number;
 Fire-resistant identification plate for engraving the UIN;
 Flight data logging capability;
 No Permission – No Takeoff (NPNT) compliant (with tamper-proof NPNT hardware and
firmware);
 Secondary Surveillance Radar (SSR) transponder or ADS-B OUT equipment (if intended to
operate beyond 400 feet/120 m AGL);
 The two-way communication system (if intended to operate beyond 400 feet/120 m AGL); and
360-degree collision avoidance system.
The Nano and Micro categories enjoy certain exemptions from the above list of features and
components, but the small, medium, and large UAS additionally need to be equipped with an
Emergency Recovery System to ensure protection from damage and public injury due to any sudden
case of airborne failure. It would further be illegal to use a drone prototype developed for research
and development purposes for any type of commercial usage.

Importing Drone Prototype or Drone Parts to India

No readymade drone prototype or drone parts can be imported to India without the prior permission of
the DGCA. Any import of a drone prototype or drone parts will need to comply with the import
regulations notified by the Directorate General of Foreign Trade. On receiving import clearance, the
authorized importer will need to obtain a unique prototype unmanned aircraft system identification
number and certificate of manufacture and airworthiness for the prototype UAS.

How to Get Your Drone Prototype Approved

The prototype unmanned aircraft system along with its design documents will need to be tested by a
government-authorized laboratory. There will be a fee applicable for this procedure. The test flights
will be carried out only under the direct supervision of an appropriately-licensed remote pilot, and
restricted up to a height of 15 meters in uncontrolled airspace and at least 50 meters away from
uninvolved personnel.

If the test report is satisfactory, the DGCA may issue a certificate of manufacture and airworthiness
for the specific type and class of drone for manufacture or import, as the case may be, to the
authorized applicant.

Each compliant unmanned aircraft will be assigned a Unique Identification Number (UIN) and given a
Unique Identification Certificate by the DGCA. In addition to the UIN, this certificate will spell out the
category, class, model number, manufacturer’s name with a serial number, year of manufacture, and
date of registration of the drone. All unmanned aircraft, except the Nano category, need to be
equipped with an electronic identification based on their UIN.
Procedure to be followed for manufacturing drones lawfully   
In case one wishes to lawfully manufacture drones, he must ensure that the following procedure is
duly followed in order to operate drones in the Indian territory:

Step 1- Obtaining Unique Authorization Number (UAN) for manufacturer   

Persons who seek to manufacture a drone first have to obtain a Unique Authorization Number (UAN)
from the DGCA under the UAS Rules, 2021. Before making the application for authorization, the
manufacturer must first obtain a security clearance from the Ministry of Civil Aviation (MoCA) in
consultation with the Ministry of Home Affairs (MoHA). The application for security clearance must be
made on the Government portal.

Once the manufacturer receives the security clearance, he will have to submit an application to the
DGCA in form UA-1 of UAS Rules along with the specified fee, which varies for each specific
category of the drone. 

Once the authorization process has been completed, the DGCA will assign a UAN to an authorized
manufacturer. This UAN will be valid for 10 years unless it is suspended, revoked, or cancelled. 

Any change thereafter regarding the credentials relevant to the eligibility criteria for obtaining the UAN
must be informed to the DGCA, and the DGCA shall issue a fresh authorization thereafter if the
eligibility conditions continue to be satisfied. 

Step 2- Obtaining equipment type approval for a wireless system used in drone   
An Equipment Type Approval (ETA) from the Wireless Planning & Coordination (WPC) Wing has to
be obtained for every model of the drone to be manufactured in India. 

In order to obtain an ETA, an application has to be made in a specified format to a Regional Licensing
Officer (RLO) of the WPC wing. These RLOs are located in Delhi, Mumbai, Kolkata, Chennai, and
Guwahati. An application form along with the technical literature, radiofrequency reports from
accredited labs and the fees to be paid have to be submitted while applying for an ETA.

Once an ETA has been issued for a particular make and model of a prototype drone, it can be used
by future users of the same make and model. 

Step 3- Obtaining unique prototype identification number   

If a drone has not been granted a Certificate of Manufacture and Airworthiness (CMA) by DGCA, it
cannot be used for sale or marketing purposes. In order to obtain a CMA, first, a prototype of the
drone must be manufactured and tested at an approved laboratory. 

The manufacturer has to make an application for obtaining a Unique Prototype Identification  Number
if he wishes to manufacture a prototype drone in India. The Unique Prototype Identification Number is
unique to every particular prototype drone and references the serial number. The application for
obtaining the Unique Prototype Identification Number has to be made under Form UA – 2 of the UAS
Rules along with the payment of the specified fee. 

Once the Unique Prototype Identification Number is received from the DGCA, it has to be affixed on
the prototype drone in such a manner that it is identifiable and visible. 
Step 4- Manufacturing a prototype UAS   
Once an authorized manufacturer has received the Unique Prototype Identification Number, he can
manufacture the prototype drone. The prototype drone is essential to obtain a CMA.

Step 5- Obtaining Certificate of Manufacture and Airworthiness (CMA)   

Once the manufacturing process of the prototype is over, the manufacturer is required to prove that
the drone is “airworthy” i.e. it is fit for airborne operations as per the stipulations prescribed by Indian
law. A drone will be considered airworthy only if it receives a Certificate of Manufacture and
Airworthiness (CMA) from the DGCA. 

A CMA can be obtained by the manufacturer by making an application under Form UA-3 of UAS
Rules to the DGCA  with the specified fee. The manufacturer must also prepare unmanned aircraft
flight and maintenance manuals and submit them along with Form UA-3. Upon receiving the duly
filled application, the DGCA allots an approved laboratory for the testing of drones. Post allotment,
the authorized manufacturer has to submit the prototype drone he manufactured in India and the
design documents to the testing laboratory. There the drone is tested for its design, structure, and
airworthiness. After the drone has been tested by the tested laboratory, it issues a test report, after
which the DGCA will issue a CMA for a specific type and class of drone if it is satisfied with the test
report. 

A drone will be allowed to operate in India only if it complies with the above steps in the
manufacturing process. If any of the above directions are not followed, the manufacturer may be
penalized. 

Penalties for unauthorized manufacture of import of drones and drone parts   

 Unauthorized import of an Unmanned Aircraft System or any part or component to India would
attract a fine of INR 25,000.
 The fine for unauthorized manufacturing of a drone or its component in India is set at INR
50,000.
 A penalty of INR 25,000 will be imposed for unauthorized buying, leasing, or selling of a drone
or drone component.
 One must be prepared to pay a fee of INR 50,000 if they falsely lend out their license,
certificate, authorization, permit, or approval or enable it to be utilized by anybody else.
 Compounding violations will be assessed at a rate of 100, 200, 300, 400, and 500 per cent for
the Nano, Micro, Small, Medium, and Large categories, respectively.

Conclusion   
The new UAS Rules have definitely made progress on the earlier guidelines but a number of
excessive compliance requirements have been added, which will increase the paperwork
requirements for manufacturing rights and will lengthen the manufacturing authorization process. All
of this is accompanied by a glaring omission of expected dates for each phase of permission and
approval, leaving no visibility into how the UAS Rules would be implemented in practice. In their
current form, the provisions have the potential to create administrative bottlenecks and a never-
ending approvals process. Furthermore, considering the stringent restrictions, it is unclear why
majority/wholly-owned Indian subsidiaries of foreign businesses have been denied access to the UAS
ecosystem. The Indian players’ significant reliance on their international rivals needs additional
liberalisation.