Drone startups looking beyond defence to serve agriculture, quick commerce
India's drone startups are rapidly tapping commercial opportunities beyond defence contracts by expanding into healthcare and quick commerce deliveries, even as the sector struggles to scale amid regulatory fog, industry executives said.
Companies like ideaForge, which started by catering to the Indian defence forces, are diversifying their client base within the defence sector itself, while others like Skylark Drones and Skye Air Mobility are consciously choosing to avoid government contracts altogether, instead betting on the private sector to scale faster.
Ankit Mehta, co-founder of ideaForge, said that traditionally the firm wasn't offering drone-as-a-service—where companies rent or hire drones (and operators) for specific tasks rather than buying and operating the drones themselves.
'But now we are. We're building our own flavour of drone-as-a-service, which can be a really strong play for enterprise security and surveillance, as well as for law enforcement activities."
However, Mehta pointed out that defence continues to remain their core customers.
'Diversification is important, but we're targeting different parts of the Forces themselves—whether it is for making deliveries within the armed forces or serving police and other law enforcement units."
Mehta added that ideaForge is working on capturing a share of the US market, particularly in the homeland security sector. However, the recent changes with respect to import tariffs in the US have adversely impacted the speed of these conversions, he said.
ideaForge's revenue declined by 80.6% year on year in Q3FY25 to
₹
17.6 crore
Some drone companies are preferring to completely avoid defence projects. 'Government in India is unfortunately not a very timely paymaster. You have to pay your employees and your vendors on day zero, but your customers might be paying you after six months," said Pushkar Singh, co-founder of investment firm Tremis Capital. Tremis Capital participated in the $4 million Series A funding round of Skye Air in June last year.
Consequently, Singh explained that most drone companies are looking beyond defence projects to diversity their customer base.
Mughilan Thiru Ramasamy, CEO of Bengaluru-based Skylark Drones, said the company didn't want to be limited to defence. "Most of our customers—almost all of them—are non-defence. We work only with private enterprises," he said. Skylark Drones' key clients include Tata Steel, Hindustan Zinc, UltraTech Cement, L&T and Reliance Infrastructure.
'We're currently not working with the defence sector at this point," said Ankit Kumar, CEO of Gurugram-based Skye Air Mobility, who added that less than 5% of the company's revenue comes from government-related projects.
'The real, long-term value lies in private sector adoption. That's where we see genuine traction. Today, less than 5% of our revenue comes from government-related projects." The rest of the revenue comes from partnerships and collaborations for drone-based logistics and deliveries, he added.
In March last year, Skye Air Mobility bagged government contracts for medical supply delivery to 6 AIIMS hospitals and other regional government hospitals. 'Even when we work with state governments in healthcare, the goal is to use that access as an entry point—to open up those corridors for the private sector," he added.
Skye Air Mobility plans to expand package deliveries across Delhi-NCR, after previously introducing a 7-minute drone service in Bengaluru, following on the heels of the quick commerce boom. Kumar added that they are currently focused on providing drone delivery services to enterprise clients rather than individual customers.
Chennai-based Dhaksha Unmanned Systems, which is owned by Coromandel Industries, is looking to expand the use of its drone technology for farm applications over the next two years, including pesticide and fertiliser spraying through drones, Mint reported in March. Dhaksha had a greater proportion of defence contracts earlier, which is shrinking now.
Investors are excited about the potential applications of drones too.
'We're seeing a wave of highly specific enterprise applications of drones, especially in critical industries like oil & gas, power, and mining. Drones make hazardous inspections safer and faster, while also monitoring transmission lines and enabling predictive maintenance. These targeted use cases are driving real value and accelerating adoption," said Vipul Patel, partner at IIMA Ventures.
IIMA Ventures, set up at IIM Ahmedabad in 2002, backed ideaForge as an early investor, and exited following its initial public offering in 2023. IIMA Ventures has also invested in Nabhdrishti Aerospace during its pre-seed round in 2024 and seed round this year.
However, India's drone regulations remain fragmented due to overlapping authorities, with the Directorate General of Civil Aviation (DGCA) setting national policies while state governments, local law enforcement, and defence agencies enforce their own rules. This has prevented some of these startups from scaling. Operators may get central clearance, only to be grounded by local authorities citing security or airspace concerns. This results in inconsistent regulations and the need for multiple clearances before drone operations can begin.
With temporary drone bans like the one recently enforced in Mumbai — from 4 April to 5 May — operational consistency also turns out to be a challenge. The ban was implemented due to concerns that drones could be used for attacks, target VVIPs, endanger public safety, or cause damage to public property.
Some Indian states like Madhya Pradesh, Andhra Pradesh, Himachal Pradesh, and Telangana—have set up their own drone policies, aiming to position themselves as drone-friendly hubs.
'Drone delivery as a service, especially in urban spaces, is frankly a daft idea because it's simply solving a problem that's already been addressed. The true potential of drones lies in last-mile connectivity to hard-to-reach areas and the scalability is more likely to be in logistics and supply chains, rather than in crowded cities," said Ajay Kumar, partner at Triumvir Law, a law firm.
There are other hurdles involved while operating in cities.
Sky Air Mobility's Kumar explained that out of the last 365 days, the company was non-operational for about 75 days because of national security restrictions like around Independence Day, Republic Day, and Section 144 imposed during elections and VIP movement. There were other days lost to bad weather such as heavy rain, high winds.
Drones cannot operate in red zones, which are sensitive areas such as the Army cantonment, or around airports, that typically form around 6-7% of certain cities, though the exact percentage can vary.
'If you look at Gurgaon, 93–94% of it is green and yellow. The red zone is just 6–7%. We're not really bothered about that—we're focused on catering to the 93%," Kumar said.
In February this year, the ministry of civil aviation told parliament that 86% of India's airspace is open for operations—classified as green zone.
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New drone PLI to focus on R&D, manufacturing, may leave out testing
Yet, not everyone is convinced about the current trajectory of drone startups. Tony Verghese, partner at law firm J. Sagar Associates, pointed out the increasing wariness of hype-driven fundraising cycles among legal professionals and investors.
'Drone startups seeking high valuations despite lacking substantial revenue or intellectual property does create significant legal and regulatory concerns within India's investment landscape…," said Verghese.
However, Skylark's Ramasamy argued that rather than rushing to regulate, the focus should be on enabling them to scale first.
'The skies are not crowded with drones yet. So, we should empower more drone flights first, before regulating them. We're still far away from the adoption of drones in terms of the number of flights taking off. Those who operate responsibly will comply either way—those with malicious intent likely won't follow rules, regardless of whether they exist," said Ramasamy.
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