Flying drones? The Drone Rules, 2021 clears the sky

Driven by innovation, technological advancements have touched human lives in an unparalleled manner. One such invention is that of drones or unmanned aircrafts, which may offer remarkable benefits in various sectors such as agriculture, national defence, geospatial mapping, etc. India may witness a multi-fold increase in the operations of unmanned aircrafts in Indian airspace, especially in the commercial sector. Therefore, innovation of such complex use must be dealt with caution to avoid any misuse.

Accordingly, the Ministry of Civil Aviation, vide its notification dated August 25, 2021, notified the Drone Rules, 2021 (‘Drone Rules’). The said rules superseded the Unmanned Aircraft Systems Rules, 2021 (‘UASR’) as the UASR had met with a tepid reaction from stakeholders. The UASR was perceived as being limiting and not conducive to the drone market in India due to several procedural requirements. The government, through the Drone Rules, has tried to reduce the bureaucratic impediments that were seen as concerns by stakeholders in the UASR, and has significantly liberalised the said rules. The Indian government intends to make India a global drone hub by the year 2030, in view of India’s traditional strengths in innovation and frugal engineering, and huge domestic demand.

The Drone Rules is based on the principles of trust, self-certification and non-intrusive monitoring, and is designed to usher in an era of growth while balancing safety and security concerns. This article aims to discuss some of the key features of the Drone Rules and issues related thereto.

Applicability of the Drone Rules and categorization and classification of drones

‘Drone’ under the Drone Rules has been defined as an ‘unmanned aircraft system’ (‘UAS’), and ‘UAS’ has been defined as ‘an aircraft that can operate autonomously or can be operated remotely without a pilot on board’. The Drone Rules applies to all persons who own, possess or are engaged in leasing, operating, transferring or maintaining a UAS in India, all UAS that are registered in India, and all UAS that are being operated over or in India.

UAS have been classified in three categories: (a) aeroplane, (b) rotorcraft and (c) hybrid UAS. The said categories have been further subcategorized as: (a) remotely piloted aircraft system (RPAS); (b) model RPAS; and (c) autonomous UAS. As per the Drone Rules, UAS has been classified based on maximum all-up weight, including payload, ranging from nano UAS (weighing less than or equal to 250 grams) to large UAS (weighing more than 150 kilograms).

Digital sky platform and ease of compliance under the Drone Rules

The digital sky platform has been established as a single window platform hosted by the Directorate General of Civil Aviation (‘DGCA’) for various activities related to the management of UAS, including registration/ deregistration of UAS, transfer of UAS, etc.

To ensure minimum intrusions, all approvals related to UAS would have to be sought through the digital sky platform. Every operating UAS would have to obtain a type certificate and a unique identification number, unless exempted by the Drone Rules. Further, on October 24, 2021, the government published the ‘National Unmanned Aircraft System Traffic Management (UTM) Policy Framework’ (‘UTM Policy Framework’) with a view to manage the interplay between manned aircrafts and UAS in relation to safety norms. The said policy framework is critical to address safety concerns and develop a  combination of standards, procedures, and real-time data exchange, as the current system for traffic management of manned aircrafts is not equipped to handle UAS traffic. The UTM Policy Framework establishes roles and responsibilities of stakeholders such as Central Government, DGCA, Airspace Management Agencies, Air Traffic Control Authority, UTM Service Provider, remote pilot, general public, etc.

An interactive airspace map for UAS operations has been published on the digital sky platform, segregating the entire airspace of India into three zones, (a) red, (b) yellow and (c) green, with a horizontal resolution equal to or finer than 10 meters. Operation of UAS in the red and yellow zones is restricted and requires prior permission for operation as per the Drone Rules, and for operation in green zones, no prior permission is required provided that the remote pilot mandatorily self-verifies the digital sky platform for restrictions.

The onus of safety of operations has been entrusted with the remote pilot or drone operator. Further, the UTM Policy Framework provides that various stakeholders in UTM ecosystem can interact and ensure safety and security aspects related to UAS operations. The safety perspective under the Drone Rules and the UTM Policy Framework do appear to be rational. However, the government, in the near future, may formulate further regulations/policies to ensure that under no circumstances is the safety of individuals compromised.

Relaxed legal regime to attract investors

To accelerate growth and make Indian markets more viable for domestic drone start-ups and foreign investors, the process of operating and manufacturing drones has been simplified under the Drone Rules. The government, under the Drone Rules, has not placed any restrictions on foreign-owned and controlled Indian companies to operate drones in India. Hence, the ease of operation reflected in the Drone Rules is expected to bring in foreign investment. In addition to cutting down on bureaucratic hindrances, the Drone Rules has significantly eased the requirements for conducting research and development (R&D) for UAS. Any manufacturer can conduct R&D without obtaining a type certificate if they have a goods and services tax (GST) identification number. Generally, the compliance requirements act as an entry barrier for market players; however, the relaxed framework under the Drone Rules would considerably boost market interest and encourage investment.

Import of UAS

The Drone Rules provide that import of UAS will be regulated by the Directorate General of Foreign Trade or any other entity authorised by the Central Government in addition to the applicable provision of the Drone Rules.

Remote pilot licence

Only the holder of the remote pilot license listed on the digital sky platform would be able to operate UAS, except for operating nano UAS and micro UAS for non-commercial purposes. Further, an individual desirous of obtaining a remote pilot licence for any category, sub-category, or class of the UAS, or a combination thereof, would be required to complete the training specified by the DGCA for such category, sub-category or class, and pass the tests conducted by the authorised remote pilot training organisation. Pursuant to the completion of the training and passing the test, the procedure for obtaining a pilotlicense is laid down under the Drone Rules, which is not complicated.

Production Linked Incentive (PLI) scheme

On September 15, 2021, the Indian government has approved a PLI scheme for drones and drone components. The key features of the PLI scheme include inter alia an allocation of INR 1.2 billion for drones and drone components over three (3) financial years. The total PLI per manufacturer is capped at INR 300 million, and PLI can be as high as twenty percent (20%) of the value addition made by the manufacturer. Micro, Small and Medium Enterprises (MSMEs) and start-ups with an annual sales turnover above INR 20 million (for drones) and INR 5 million (for drone components) respectively, would also be eligible for incentives under the PLI scheme. The PLI scheme also covers developers of drone-related IT products. The detailed guidelines related to PLI scheme will be notified separately. The PLI scheme is expected to lead to indigenisation and aid the manufacturers of drones and drone components to scale up their production in India.

Privacy and safety concerns

While the Drone Rules bring procedural clarity on many aspects for manufacturers and operators of UAS, the lack of clarity with regard to the privacy and safety is concerning. Some of the issues such as (a) whether green zones for operating UAS would include civilian or residential areas or not; (b) data collection by UAS and treatment of such data vis-à-vis privacy laws;(c) inbuilt safety measures in UAS and carriage of payload; and (d) no tracking of the R&D operations of UAS, have not been adequately dealt with. Therefore, future regulatory developments relating to public safety and privacy would have to be closely followed.

Conclusion

The Drone Rules is a welcome regulatory breakthrough for the drone sector in India. The said rules, coupled with the PLI scheme, are likely to provide the necessary boost to the sector as the procedural requirements as compared to the UASR have been watered down and manufacturers are eligible for incentives mentioned in the PLI scheme. However, certain regulatory concerns with respect to the privacy and data related aspects have been raised by stakeholders and the public at large as the Drone Rules do not touch upon the said aspects. Even though the superseded UASR had, albeit briefly, assigned the obligation on an authorised drone operator to ‘ensure the privacy of a person and its property during operation’, yet a similar provision in the Drone Rules is absent. Therefore, it would be interesting to see how the regulation relating to drones further evolves to address the growing concerns relating to privacy. It may be the case that the much-awaited data protection laws in India may address the said concerns relating to privacy and surveillance in a composite manner. Therefore, tracking regulatory developments in this sector is necessary to see how the legal framework relating to drones’ sector evolves in India.

The article has been written by

Rahul Chadha, Managing Partner, Chadha & Co

Rupali Srivastava, Senior Associate, Chadha & Co