Mumbai in May is many things – humid, relentless, opinions around every corner. But adding to all that was Imaginxt 2026, which brought along several thousands of people who were certain that they were making the future. Amidst this organised chaos, I got the opportunity to speak to Smit Shah, the President of the Drone Federation of India, about an industry that had been undergoing some of its most exciting times of late. The discussion ranged from war, supply chain to robotic flights and autonomous home deliveries.
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Talk to Shah about the state of India’s drone industry in 2026 and he will assure you that it is doing even better than anyone imagined and growing at a pace beyond any model to accurately predict. Over 600 drone makers. Well over 200 suppliers of components. A defense sector that is, in his words, “booming like anything.” And a counter-drone market – the business of stopping the wrong drones from doing the wrong things – that’s quietly becoming one of the most interesting verticals in the entire ecosystem.
$11 billion. This, according to DFI, was the value that they had estimated the Indian drone market to reach by 2030. “The West Asia war has essentially tossed all those numbers. The market is going to be much bigger than that.” Sometimes, a geopolitical event can give your industry more of a boost than anything else.
One more thing that the West Asia war has made clear is that it is simply suicidal to base an industry on hardware on one fragile supply chain. Shah is not sugar coating things here. Supply chains “are messed up everywhere” and Drones are no exception.
He suggests that there should be three major steps taken by entrepreneurs developing hardware industry in India. The first step is to focus on building something that will require components that are available locally. The second piece of advice may seem too obvious. Still, Shah insists that “Don’t just build a very intelligent electronic robot on one processor. Make sure that the design can factor in three processors, so that when there is a shortage with one, you can work with the other.” Third, and Shah is emphatic here, cybersecurity is its own beast entirely. Not a supply chain footnote. A separate problem that needs a separate solution.
The good news is that the industry has been listening. India’s top drone companies are now 70–75% indigenous. The tier below that? Around 50–55%. “Everyone is working very hard,” Shah says, “either to build everything from India, or build from multiple sources and not China.” The China dependency that defined the sector just a few years ago is being dismantled, piece by piece, processor by processor.
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Mention physical AI, aerial drones communicating with ground robots to ensure fully autonomous deliveries, and Shah does not flinch. This is already happening with companies such as Skye Air; drones deliver packages and then ground robots bring it right to your doorstep, without any human interference at all. In this regard, Shah has a highly practical opinion about the regulatory front of the matter at hand. At scale, the ground robots would not be operating on an open road, they would move through residential societies or office complexes with dedicated drop zones for the drones to hand over the package to them. “It’s not going to create a traffic snare,” says Shah, and so the elaborate regulatory framework governing autonomous vehicles is just not relevant here. And what about the drones themselves? “Autonomy in the air,” Shah says, “is much easier than autonomy on the ground.” File that one away.
When asked to identify the one policy reform that made all the difference, Shah goes back to 2021 – namely, the time when somebody had the guts to ask an awkward question: If ten thousand drones are required to be flown in a particular day in Indian skies, what kind of framework do you have for them? The answer, it turned out, was that the existing framework couldn’t handle it. So it got rebuilt. Twenty-five permission types became five. Seventy-two instances requiring government fees became four. Eighty pages of regulation became eight. “Things are in a good place,” Shah says, with the caveat that people are still quietly buying illegal Chinese drones for farming and photography, which remains a headache that is yet to be fully solved.
There is a boom in the defense drone industry, it is significant, and it demands attention. According to Shah, the market for drones for military purposes will grow five-six times within the next couple of years. Such growth creates gravity. However, Shah dismisses concerns related to the decline in the development of civilian applications such as agriculture, logistics, and inspections. They have not suffered from the defense boom at all, he believes. On the contrary, it’s just made a big market suddenly look even bigger. And here’s the thing about drone components: most of them don’t care whether they’re in a military surveillance drone or an agriculture sprayer. They’re dual-use. “When you accelerate the military market,” Shah says, “you are in some form and fashion accelerating innovation, which then will have derivative effects in the civilian market as well.”
In other words: a rising tide, even a very loud, defense-funded one, still lifts all drones.
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