Why India’s Drone Power Depends on Silicon, Not Wings

Why components, not platforms, will define India’s UAV future

Introduction

India’s drone ecosystem is expanding at remarkable speed. From border surveillance and maritime patrol to logistics, agriculture, and internal security, unmanned systems are now embedded across national priorities. Government reforms such as the Drone Rules 2021, Production-Linked Incentives (PLI), and defence indigenisation lists have catalysed growth, while startups and private industry have injected agility and innovation.

Yet, beneath this momentum lies a quieter, more consequential challenge, India’s drone supply chain remains structurally fragile, import-dependent, and unevenly regulated. As recent global conflicts have demonstrated, wars are no longer decided by platforms alone, but by the resilience of the supply chains that sustain them.

For India, achieving drone dominance will depend less on airframes and more on control over electronics, propulsion, sensors, and secure data pathways.

India’s Drone Market: Growth vs Ground Reality

India’s drone market was valued at approximately USD 1.6 billion in 2024, with projections ranging between USD 1.8–2.0 billion by 2030, growing at a CAGR of 15–18%. Defence and homeland security applications account for nearly 40% of this demand, followed by agriculture, mapping, and infrastructure monitoring.

However, India’s share of the global drone market remains below 1%, highlighting a gap between ambition and industrial depth.

Critical data point

Despite over 600 drone companies and startups, an estimated 65–70% of core drone components used in India—particularly motors, flight controllers, GNSS modules, cameras, and RF links—are imported directly or indirectly.

Anatomy of India’s Drone Supply Chain

India’s strength today lies in:

• System integration
• Airframe design
• Mission software
• Ground control systems

But vulnerability persists in:

• Semiconductors and flight controllers
• Precision motors and magnets
• Electro-optical / infrared sensors
• Secure datalinks and encryption modules
• Battery chemistry and power management

Many of these components are sourced through third-country routing, masking their true origin and complicating traceability for defence users.

Defence Supply Chains: Where Risk Becomes Strategic

In defence applications, supply chain weaknesses translate directly into operational and national security risk. Imported electronics raise concerns related to:

• Firmware integrity and update control
• Embedded cyber vulnerabilities
• Long-term spares availability during crises
• Vendor leverage during geopolitical escalation

Unlike traditional weapon systems, drones depend heavily on commercial off-the-shelf (COTS) electronics, where cost efficiency often conflicts with security assurance.

India’s current procurement frameworks still emphasise platform indigenisation more than component provenance, creating blind spots at Tier-2 and Tier-3 levels.

Grey Zones in India’s Drone Supply Chain

Several unresolved grey areas persist:

• Dual-use components entering defence platforms
• Ambiguity in “trusted source” definitions
• Firmware ownership for imported controllers
• Cloud-based mission planning software hosted overseas
• Lifecycle dependence on foreign vendors

These gaps are manageable in peacetime—but dangerous during conflict or sanctions.

The Cost–Sovereignty Dilemma

Indigenous components often cost 20–40% more than imported equivalents. For commercial operators and startups, this creates pressure to prioritise price over provenance.

Without sustained government demand signals and long-term procurement commitments, domestic component manufacturers struggle to scale, trapping the ecosystem in a dependency loop.

What India Is Doing Right

Despite challenges, several positives are unmistakable:

• iDEX and Make-I/II enabling rapid prototyping
• Growing acceptance of private sector drones by Armed Forces
• Defence indigenisation lists restricting imports
• PLI schemes expanding electronics manufacturing
• Increasing inter-service demand for UAVs

India is transitioning from import substitution to capability creation—a crucial shift.

What Must Come Next

To secure its drone future, India needs a supply-chain-first strategy, including:

1. Trusted Drone Component Certification Framework
2. Mandatory supply chain disclosure for defence UAVs
3. Incentives focused on Tier-2 and Tier-3 manufacturing
4. Unified civil–military drone certification standards
5. Long-term procurement visibility for component vendors

Drones will increasingly define battlefield awareness, logistics resilience, and deterrence. In that future, supply chains will be as decisive as squadrons.

Batteries & Power Systems

Global Suppliers

• CATL — China, one of the world’s largest Li-ion battery makers used in UAVs. 
• Amperex Technology Limited (ATL) — Chinese battery supplier in many commercial drones. 
• Panasonic — batteries & BMS used in industrial and professional drones. 
• EEMB Battery — Li-ion packs and BMS options for aerial use.

India/Local Players

• Bharath Components — DGCA-aligned drone batteries with battery management. 
• Bharat Skytech — high-performance motors & battery solutions tailored for agricultural drones. 

Brushless DC Motors & Propulsion

Global Suppliers

• T-Motor — brushless motors popular in commercial & heavy-lift drones. 
• DJI OEM Motors (from DJI supply chain) — widely used globally. 
• KDE Direct — high-performance motors for professional UAVs. 
• Hobbywing — motors, ESCs, and other propulsion hardware. 

India/Local Suppliers

• Bharath Components — BLDC motors designed for Indian mission profiles. 
• Aero360 — Indian firm making tailored frames & motors. 
• Bharat Skytech — field-tested high-performance motors for agriculture use. 

Flight Controllers (Firmware + Control Electronics)

Global Suppliers

• Pixhawk / PX4 ecosystem — open-source flight controller hardware used widely. 
• CUAV — professional flight control stacks for industrial drones. 
• Holybro — FC boards compatible with ArduPilot/PX4 systems. 

India/Local Suppliers

• IdeaForge — Indian manufacturer that also develops core drone control systems and communications. 
• Garuda Aerospace — develops autopilots and integrated flight systems. 
• Asteria Aerospace — Bengaluru-based firm with proprietary flight electronics and payload integration. 

GPS / GNSS / Navigation Systems

Global Suppliers

• u-blox (Switzerland) — leading GNSS modules (GPS + GLONASS + Galileo). 
• Quectel — cellular + GNSS modules widely used in drones. 
• Here3 RTK Modules — high-precision GPS units used in RTK systems. 

India/Local Suppliers

• Garuda Aerospace — includes GPS modules in their drone avionics. 
• Bharath Components — GNSS modules engineered for Indian UAVs. 

Sensors & Imaging Payloads

(Cameras, LiDAR, thermal, IMU, barometers, etc.)

Global Leaders

• Sony — image sensors used in many UAV cameras. 
• FLIR / Teledyne FLIR — thermal and IR imaging payloads. 
• Bosch / TDK / Melexis — IMUs, motion sensors, barometers. 
• Intel RealSense / Qualcomm depth sensors — advanced sensing tech. 

India / Regional

• Asteria Aerospace — surveillance and high-resolution camera payloads. 
• IdeaForge — integrated ISR sensor suites tailored for defence missions. 

Propellers, Frames, and Structural Parts

Global Manufacturers

• Gemfan — widely used propeller brand across drone classes. 
• HQProp — performance propellers for racing and commercial UAVs. 
• Composite suppliers (e.g., Hexcel for carbon fiber) — structural materials. 

India / Local

• Aero360 — Indian supplier of frames, propellers, and custom mechanical parts. 
• Bharath Components — offers propellers tailored to Indian drone specs. 

RF & Communication Modules

Global Suppliers

• Skyworks, Analog Devices, Qualcomm — RF transmitters/receivers for command-and-control links. 
• Digi International / Lantronix — IoT communication modules sometimes used in telemetry. 

India / Regional

• Local system integration often combines global RF modules with Indian ground control and telemetry, as Indian standalone indigenous RF module manufacturing is still nascent.

Notes on the Global Context

• China dominates production of 70–80% of commercial drone parts (motors, speed controllers, sensors, propellers), illustrating global supply concentration. 
• Emerging global collaborations (e.g., Schaeffler × Helsing) show automotive/industrial firms entering drone component supply chains to enhance resilience. 

Selection Summary (by Component Type)

Semiconductors, Flight Controllers and the Indian Drone Supply Chain Challenge

Indian drone manufacturers particularly those working on FPV, tactical, and medium UAV platforms—face a structural bottleneck that mirrors challenges seen globally: semiconductors remain the single most difficult supply chain vulnerability to address.

According to industry stakeholders involved in India’s defence drone ecosystem, flight controllers (FCs) the cognitive core of a drone represent a critical choke point. FCs integrate multiple silicon-based components, including microcontrollers, inertial sensors, power management ICs, and navigation interfaces. Despite growing domestic assembly capability, India remains heavily dependent on imported semiconductors, many of which are fabricated in China or rely on China-linked foundries.

This dependency persists even when components are sourced from Europe, Taiwan, or Southeast Asia, as manufacturing origin and foundry provenance are often opaque, with limited traceability available at the component or chip level.

Flight Controllers, ESCs and the Silicon Dependency

Flight controllers translate radio commands into motor actions while simultaneously calculating orientation, speed, and navigation using gyroscopes, accelerometers, barometers, and GNSS inputs. Electronic Speed Controllers (ESCs), usually stacked alongside FCs, convert these commands into precise motor thrust.

In India, FCs and ESCs are typically procured as commercial off-the-shelf (COTS) stacks, even for defence and paramilitary drones. While domestic firms assemble and integrate these stacks, the silicon inside remains largely imported, creating both security and continuity risks.

Smarter FCs are now enabling:

• AI-assisted navigation
• Autonomous waypoint and target tracking
• LTE / 4G / 5G connectivity
• Edge computing for ISR missions

Platforms similar to Auterion’s Skynode manufactured outside China are encouraging developments globally. However, in India, AI-enabled autonomy is still limited to a small subset of defence trials, and most operational drones rely on conventional navigation logic.

This has not slowed AI development. Indian startups and defence labs are actively exploring:

• Vision-based navigation
• Autonomous loitering munitions
• AI-assisted target recognition

Yet, AI modules do not eliminate dependency. They still require sensors, cameras, IMUs, and memory chips—many of which are low-cost, China-origin components, particularly in FPV-class and attritable drones.

Grey Areas in Component Provenance

Assessing semiconductor origin remains exceptionally difficult. While some chips carry identifiable markings, many do not. Foundry information is frequently absent from datasheets, even for widely used microcontrollers.

This challenge is not unique to India. A 2024 US industry survey found that nearly half of circuit-board manufacturers could not confirm whether their products contained chips fabricated in China. Indian MSMEs, which operate with even thinner compliance and audit capabilities, face a more acute version of this problem.

As a result, “Indian-assembled” does not necessarily mean “China-free”, particularly at Tier-2 and Tier-3 component levels.

Cost Pressures and the NDAA Parallel

Indian manufacturers attempting to source non-Chinese or NDAA-aligned electronics face steep cost penalties. In 2025 price comparisons:

• NDAA-compliant FC–ESC stacks were often 2–3 times more expensive
• Comparable Chinese-origin FPV stacks remained significantly cheaper and widely available

For startups and private manufacturers operating on narrow margins—especially those supplying state police, paramilitary forces, or export markets—cost competitiveness often overrides provenance considerations, unless explicitly mandated by the customer.

This cost asymmetry mirrors global realities: China’s dominance in mature-node semiconductors (40–65 nm processes) enables lower prices due to:

• Subsidised fabrication
• Lower labour costs
• Integrated electronics clusters

Even European manufacturers such as STMicroelectronics whose STM32 processors are widely regarded as “industry standard” and used in many trusted drone systems have expanded manufacturing capacity in China to remain cost-competitive. Meanwhile, Chinese alternatives such as ArteryTek’s AT32 MCUs have emerged as direct substitutes, further strengthening domestic Chinese supply resilience.

Motors and Permanent Magnets: India’s Silent Vulnerability

If semiconductors are the brain problem, motors are the muscle problem.

Brushless motors used in FPV, and tactical drones rely on neodymium iron boron (NdFeB) permanent magnets, an area where China controls close to 90% of global supply. These magnets enable high torque, fast response, and agile flight—critical for FPV drones and loitering munitions.

For India, this creates a severe vulnerability:

• Non-Chinese neodymium supply exists but can cost 5–10 times more
• Indigenous magnet production is limited and environmentally complex
• Even “locally assembled” motors often visibly use Chinese brands or Chinese-origin magnets

Industry experts interviewed in India consistently identify motors as one of the most fragile points in the drone supply chain, particularly for scalable defence production.

While motor housings can be 3D-printed and assembled domestically, replicating Chinese manufacturing quality at scale remains the real challenge. Producing 10,000 motors with consistent tolerances, testing standards, and cost control is fundamentally different from small-batch assembly.

As one global drone manufacturing executive noted—a sentiment echoed by Indian industry leaders:

“The challenge isn’t building a motor. The challenge is building ten thousand identical motors that all meet performance, reliability, and cost targets.”

Sensors, Cameras and Thermal Payloads

India’s expanding use of drones in border surveillance and counter-insurgency has driven rising demand for compact EO/IR sensors.

Encouragingly:

• Sony supplies image sensors for several NDAA-compliant drone cameras
• Some Indian firms are assembling camera payloads domestically using Japanese and Korean components

However, cost remains a deterrent. Building a camera system with zero Chinese inputs can cost multiple times more than sourcing Chinese-origin modules.

Thermal imaging presents an even sharper constraint. High-performance infrared sensors rely on germanium lenses, a material where China again dominates global supply. This has direct implications for:

• Military-grade thermal payloads
• Night ISR missions
• Autonomous target detection

Even US, South Korean, and European manufacturers remain dependent on China for germanium, underscoring how deeply embedded this vulnerability is.

Gimbals: Precision Manufacturing as a Differentiator

Drone gimbals—essential for stabilised imaging—were once dominated by Chinese manufacturers. While global alternatives are emerging (including suppliers in Southeast Asia and Taiwan), precision manufacturing remains capital-intensive and technically demanding.

Indian industry and academia increasingly recognise gimbals and precision electromechanical assemblies as a potential domestic strength area—but one that requires sustained investment and long-term demand visibility.

Implications for India

Taken together, these realities underline a hard truth:

India’s drone supply chain challenge is not about airframes—it is about materials, magnets, and microelectronics.

As demand for drones rises across defence, internal security, logistics, and civilian sectors, India will face:

• Price volatility
• Supply disruptions
• Strategic leverage risks
• Competition with EVs, wind energy, and automotive industries for critical materials

Without targeted intervention, China’s structural cost and scale advantages will continue to shape India’s drone ecosystem, even as assembly and integration become increasingly indigenous.

Strategic Takeaway

For India, decoupling drone supply chains from China is not a near-term binary choice, but a long-term industrial strategy problem. The solution lies in:

• Selective sovereignty (critical components first)
• Trusted supplier frameworks
• Defence-led demand assurance
• Regional partnerships (Japan, Taiwan, South Korea)
• Realistic acceptance of cost trade-offs

In the drone era, strategic autonomy will be measured not by who builds the drone—but by who controls the silicon, magnets, and sensors inside it.

The India–Taiwan–Japan Drone Supply Chain Triangle

A pragmatic pathway to reduce China dependence without breaking the ecosystem

As India evaluates options to reduce strategic dependence on China in drone supply chains, a triangular partnership model involving India, Taiwan, and Japan emerges as the most viable and realistic alternative. Unlike complete decoupling—which is neither feasible nor cost-effective in the near term—this triangle offers selective sovereignty, trusted manufacturing, and technology depth.

Rather than competing with China’s scale, the triangle leverages complementary strengths.

Strategic Logic of the Triangle

• India: System integration, software, assembly, defence demand, scale of use
• Taiwan: Semiconductors, SBCs, electronics manufacturing discipline
• Japan: Sensors, optics, materials science, precision manufacturing

This division mirrors how modern aerospace supply chains already function distributed, specialised, and alliance-based.

Table 4: India–Taiwan–Japan Capability Mapping (Drone Components)

Why Taiwan Matters for India’s Drone Ambitions

Taiwan occupies a unique position in global electronics:

• World leader in mature-node semiconductor fabrication
• Proven supplier of RP2040 processors used in UAV SBCs
• Deep expertise in PCB fabrication and electronics assembly
• Cost higher than China, but predictable and trusted

For India, Taiwan offers:

• A realistic substitute for Chinese silicon in FCs and AI modules
• Alignment with Quad supply-chain resilience initiatives
• Low political friction compared to Western fabs

Key Insight –Taiwan doesn’t replace China’s scale—but it replaces China’s risk.

Japan’s Quiet but Critical Role

Japan rarely dominates headlines in drone debates, yet it is indispensable in high-trust components:

• Sony CMOS sensors (used globally, including NDAA-compliant drones)
• Advanced optics, lenses, and materials science
• Exceptional manufacturing discipline and reliability
• Access to non-Chinese rare earth processing (Malaysia-linked supply chains)

Japan is particularly important for:

• EO/IR payload credibility
• Precision gimbals
• Long-life, high-reliability defence systems

In many ways, Japan anchors the “quality ceiling” of the triangle.

India’s Role: Demand, Integration, and Scale

India contributes what Taiwan and Japan cannot:

• Large defence and homeland security demand
• Rapid prototyping via iDEX and Make programs
• Software, AI, and mission system development
• Operational feedback from real-world deployments

India becomes the system-of-systems integrator, converting allied components into deployable military capability.

Table 5: China vs India–Taiwan–Japan (Reality Check)

Conclusion: From Drone Platforms to Defence Supply Chain Power

• For Indian Defence, drones are no longer experimental systems or force multipliers on the margins—they are becoming foundational capabilities across surveillance, strike, logistics, maritime domain awareness, and internal security. The operational lessons emerging from contemporary conflicts are unambiguous: the effectiveness of unmanned systems is inseparable from the resilience of the supply chains that sustain them.

• India has made commendable progress in drone platforms, mission software, and systems integration. Yet, as this analysis shows, strategic vulnerability today lies not in airframes, but in silicon, magnets, sensors, and materials. Semiconductors inside flight controllers, neodymium magnets inside motors, germanium in thermal optics, and foreign-origin firmware embedded deep in electronics collectively shape battlefield reliability and wartime availability.

• For the Indian Armed Forces, this reality demands a shift in mindset—from platform-centric procurement to supply-chain-centric capability planning. A drone assembled in India but dependent on opaque or adversarial supply chains cannot be considered a fully sovereign military asset. In future contingencies, denial of components, spares, or firmware updates may prove as decisive as kinetic engagement.

• At the same time, the solution does not lie in unrealistic or immediate decoupling. India must instead pursue selective sovereignty—prioritising control over the most critical components while leveraging trusted international partnerships. The emerging India–Taiwan–Japan supply chain triangle offers a pragmatic pathway, combining India’s integration and operational scale with Taiwan’s semiconductor depth and Japan’s excellence in sensors, optics, and precision manufacturing.

• For the Ministry of Defence, programmes such as iDEX, Make-I/II, and the Positive Indigenisation Lists now need to evolve beyond platforms and explicitly address component provenance, trusted supplier certification, and long-term industrial assurance. Demand certainty from the Services will be essential to enable Indian industry—particularly MSMEs and deep-tech startups—to invest in scaling production, quality control, and material science.

• Ultimately, Atmanirbhar Bharat in drones must be defined not by the percentage of indigenous assembly, but by assured access, auditability, and survivability of supply chains in crisis and conflict. The nations that dominate the next phase of warfare will not simply be those that field the most drones—but those that can sustain, repair, adapt, and replace them under pressure.

• For Indian Defence, the imperative is clear: airpower in the unmanned era will be won as much in factories, fabs, and materials labs as it is in the skies.