A Shot in the Arm for Innovation and IP: Budget 2022

The past two years have brought to the forefront the paramount importance of technology. The Economic Survey 2021-22 was a precursor to the Union Budget that built a foundation for a wave of innovations by incorporating a tech-forward and futuristic outlook across various relevant sectors. Drone technology, artificial intelligence, blockchain and the issuance of a Central Backed Digital Currency (“CBDC”) were a few of the issues that were highlighted.

The Finance Minister mentioned the word ‘Atma Nirbhar’ approximately six (6) times in her address. The vision of self-reliance, or ‘Atma Nirbhar’, has been a rallying call for the government in the last few years, hence manifesting the importance of this philosophy.

Green India

 
There has been increased awareness of both the ill effects of climate change as well as the various pollutants that are damaging the environment. The Union Budget took note of this with announcements for the implementation of Energy Service Models (ESCO) as well as the development of business models for batteries or energy as a service. The Finance Ministers’ mention of a battery swapping policy as well as interoperability standards for charging electric vehicles indicates an urgency for innovation in this space to reduce the carbon footprint. With an increased focus on electronic vehicles, the future is indeed bright for battery makers to bring forth further innovation to reduce costs for battery replacement as well as tackle the inadequacy of public charging infrastructure. Such innovation will lead to an increase in patented technology in the field of green energy. In addition, the impetus given through the additional allocation towards solar equipment manufacturing and the issuance of green bonds for boosting green infrastructure are big steps towards a green economy driven by technological enablement.


The 5G connection

 

The much-anticipated 5G spectrum auctions are set to be conducted in 2022 to facilitate the rollout of 5G mobile services. As a part of the PLI Scheme, a designed-led manufacturing framework is proposed to be launched to build a strong 5G ecosystem in the country. The technology will be a catalyst to innovation in several sectors such as healthcare, automotive, research, defence, manufacturing etc. Additionally, 5G and R&D shall prove to be a stepping stone into the new era of businesses being more appreciative of the complexities and importance of the IP regime to gain maximum benefits amidst a growing tech-friendly and driven market.

Wearables

 

With the announcement of a graded rate structure of the customs duty rates, the focus on ‘Atma Nirbhar Bharat’ is very much prevalent to facilitate further domestic manufacturing of wearables. This can be an impetus for further innovation from both existing domestic companies as well as the genesis of newer ones. Wearables have garnered a lot of attention in recent times and there is a lot of scope for newer players in this field with unique trademarks whose innovations will give rise to numerous patents.

Eye in the Sky

 

Climate change has adversely impacted the farming sector and the need of the hour is sustainable land management and a change is required in the manner of farming. The announcement of the ‘Drone Shakti’ scheme as well as the use of drones to assist in spraying of insecticides and nutrients and for crop assessment heralds the advent of e-agriculture which is important for an agriculture-based country like India. A drone can assist farmers with crop production, early warning systems and disaster risk reduction. Additionally, the drones–as–a–service (DRaaS) model will act as a fillip for startups in this nascent sphere of activity and increase innovation and adoption of drone technology for e-agriculture in the coming years.

Blockchain Technology

 

Months of uncertainty ended with the announcement of the CBDC, which will act as an impetus to the digital economy. The CBDC will be based on blockchain technology, thus also welcoming the use of blockchain technology in the future as a building block for the digital economy. The introduction of the digital yuan in China heralded the incorporation of new mechanisms to adopt CBDC’s among apps and providers of payment solutions. The government intends to launch the digital rupee from 2022- 2023 and therefore, this year will be a watershed moment for the adoption of blockchain technology.

The advent of the blockchain will increase its utility in various other sectors as well such as sports, NFT’s, smart contracts, etc.

 

Edtech

 

Education has moved from the erstwhile hallowed classrooms to the living room in the last two years. Classrooms became virtual and education too was touched by the Digital India initiatives. Into this space came EdTech companies with tie-ups and a range of courses to upskill not only students but professionals as well. The Union Budget proposed the launch of a digital university to enable access to education to all at one’s doorstep. Additionally, the Budget announced a skill-development initiative in a digital ecosystem called the DESH stack e portal. The use of technology in the education sector will not only increase, but we will see further innovation in both the medium of dissemination of information as well as the advent of artificial intelligence-based learning tools and the issuance of certificates via the use of blockchain technology to name a few changes one could see. With each platform wanting to garner the largest consumer base, the protection of intellectual property will be at the forefront of this sector.

HealthTech

 

The pandemic has not just intensified the need for health-related technological innovation, but the digital support offered by AI and automation during the crucial period has also punctuated the future of HealthTech with burgeoning prospects. This has been acknowledged in the budget with the introduction of an open platform for the National Digital Health Ecosystem consisting of digital registries of health providers and health facilities, a unique health identity, consent framework, and universal access to health facilities. This would legitimize, increase access as well as boost consumer confidence in the sector’s offerings, thus leading to more investment and more innovation. Moreover, the recognition of mental health issues, as well as the support system, proposed to be established to address them in the form of a ‘National Tele Mental Health Programme’ and Tele-mental health centres of excellence makes this discipline, which was hitherto marred by discomfiture, lucrative.

The Future

 

With path-breaking changes in both the technology at use as well as the improvements in the current technology at use, we will see a huge number of intellectual properties being created. The renewed focus on ‘Atma Nirbhar’ will encourage startups to push forward with innovation in varied fields that will optimise a market ecosystem that deploys the use of drones, e-agriculture, EdTech, blockchain etc.

There has always been a direct correlation between innovation and the protection of intellectual property. The views of John Locke through the Labour Theory and Hegel through the Personality Theory are of utmost relevance considering this forward-looking union budget. Intellectual Property and its protection will not only reward the creator for their work, but will also protect their personality in the work, resulting in continued innovation.

With the stage set for some landmark innovations in the upcoming years, and various actors waiting in the wings, intellectual property and the challenges of enforcement will take centre stage.

References:

Image Credits: Photo by kiquebg from Pixabay 

There has always been a direct correlation between innovation and the protection of intellectual property. With the stage set for some landmark innovations in the upcoming years, and various actors waiting in the wings, intellectual property and the challenges of enforcement will take centre stage.

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Frequently Asked Questions (FAQs) on Flying Drones in India 2021

Drones have been buzzing to become the next significant tech-fascination. Owing to their sleek build, agile mobility and ability to access areas of topography beyond the reach of humans; they are increasingly relevant in today’s innovation and utility-driven technology trends. However, as with any pioneering design, the value of drones largely depends upon the intention of their use. For instance, they can be employed to perform illegal or destructive activities by terrorist groups as was evident from the June drone attack at the Indian Airforce Station in Jammu.[1] Additionally, they can easily malfunction and cause unintended harm to human life or the environment.

In view of their heightened demand and novelty, governing their usage and ownership became imperative and consequently, in March 2021, the Ministry of Civil Aviation published the Unmanned Aircraft System (UAS) Rules, 2021. However, the UAS rules were perceived as restrictive and complex. Based on the feedback from various stakeholders the UAS Rules, 2021 were repealed and the new Drone Rules, 2021 were notified under the Aircraft Act, 1934;  their scope excluded the actions done or omitted before the enforcement of these rules. Here are a few pertinent questions that we have tried to answer in light of the new rules:

Do I need a drone pilot license for flying drones in India?

 

One would require a remote pilot license to fly a drone in India unless exempted. The exceptions include the operation of nano drones and the non-commercial operation of micro-drones (i.e., drones weighing between 250 grams and 2kg). 

Additionally, no remote pilot license is required for drones operated for testing purposes within the premises of a research and development entity / educational entity under the Central government, drone manufacturer with a GST, Start-up recognized by the DPIIT, or an authorized testing entity when operated within the green zone.

Are there any restrictions on flying drones at night or over people in India?

 

The current regulations are silent on the timing at which drones can be flown. However, as night-time flying of drones will have additional safety implications and may require drones to be fitted with other mandatory safety features such as anti-collision lighting, we will have to wait for further clarification/notifications from the Ministry in this regard.

Is there a last date for registering my drone in India?

 

As per the Drone Rules 2021, a person owning an unmanned aircraft system manufactured in India or imported into India on or before the 30th day of November 2021 must make an application to register the drone and obtain a UIN by 31st December 2021. But, as per the Digital sky platform, the last date to obtain a Drone Acknowledgment Number (“DAN”) for an unlisted drone is 30th November 2021. Therefore, there seems to be a conflict between the dates specified on the website and the new drone rules. Also, as per the digital sky platform and the press release by the ministry of civil aviation one must have a DAN, a GST-paid invoice and must be part of the list of DGCA-approved drones to enlist an existing drone. 

Do I need permission to fly toy drone in India?

 

Under the guidelines to enlist an existing drone, it clearly specifies that all unmanned aircraft needs to be enlisted and it has been clarified that this includes models, prototypes, toys, RC aircraft, autonomous and remotely piloted aircraft systems, etc. [2] From these guidelines on the enlistment of drones it can be inferred that unmanned aircraft also includes toys. Thus, toy drone manufacturers/operators would need to obtain the compulsory permissions under the rules.

A remote pilot license is not required to operate nano drones and micro drones (i.e., drones weighing between 250 grams and 2kg) used for non-commercial purposes.  Type certification is not required for nano drones and model remotely piloted aircraft systems (i.e., drones used for educational, research, testing, design, and recreational purposes weighing below 25 kgs and operated within the visual line of sight). All drones need to obtain a UIN except drones used for testing purposes within the green zone and premises of the testing entity.

Hence, toy drones would require a UIN and, may require a remote pilot license and type certification depending on the size and nature of the drone. It would also need to be ensured that the drone is being flown in the green zone and that there are no notifications/restriction on the digital sky platform for drone operation in the intended area of operation.

Are there any restrictions on flying drones remotely over the internet?

 

“Remotely piloted aircraft” is defined by Drone Rules as an unmanned aircraft that is piloted from a remote pilot station. One must obtain a remote drone pilot license and type certify drones unless exempted to operate drones. Model remotely piloted aircrafts have to be operated within the visual line of sight. 

Other than the type certification and the remote pilot license, all drones need to obtain a UIN. They should not carry dangerous goods or arms, ammunitions etc. unless permitted by the concerned authority. They have to fly within the permitted zones and not violate the right of way of a manned aircraft.

The current regulations are silent on the operation of drones Beyond Visual line of sight (BVLOS). However, it is observed that entities are still availing conditional exemption for BVLOS operation from the Ministry.

What are the customs regulations for entering India with a drone?

 

Under the Drone rules, import of Drones is to be regulated by the Directorate General of Foreign Trade (DGFT) or any other authorised entity. The DGFT has not released any specific import policy on drones after the release of the rules. Under the existing Import Policy by the DGFT, import of Unmanned Aircraft System is “Restricted” and requires prior clearance of the Directorate General of Civil Aviation (DGCA) and import license from DGFT.  Nano drones (i.e., drones weighing up to 250 grams) and operating below 50ft/ 15 meters above ground level are exempted from the requirement of an import clearance from the DGCA or import license from the DGFT.[3]

Although the new rules have eliminated the requirement for import clearance from the DGCA, the DGFT is yet to update the import policy and remove the requirement from the import policy.

Further, the Import Policy by the DGFT refers to the Guidelines issued by the Directorate General of Civil Aviation. These guidelines mandate that anyone wishing to import must obtain Equipment type approval from the Wireless Planning and Co-ordination Wing, Department of Telecommunication for operating in de-licensed frequency bands. [4]  An application has to be made for a Unique Identification Number (UIN) post the necessary approvals are obtained to operate a drone in India.

Can drones be used for food/package delivery/advertisements in India?

 

The current rules prohibit the carriage of arms, ammunitions munitions of war, implements of war, explosives and military stores, etc. unless permitted by Central Government. It also regulates the carriage of dangerous goods as per the Carriage of Dangerous Goods Rules, 2003. Other than the above, the current regulations are silent on the aspect of permitted payloads.

When it comes to drones, unlike aeroplanes that generally take-off from an airport, there are no specific ports from which drones are flown. The new rules mention the development of policy framework for developing corridors for safe and seamless transfer of goods by drones. As goods on a drone could have potential dangers such as accidental drops during flight and difficulty in regulation, it is possible that these will require further regulation. The 2018 CAR and UAS Rules, 2021 required drone operators to get special approval to drop/discharge substances. Such conditions are not specified in the current rules. It would be advisable to get special clarification from the DGCA on permitted payloads as there are additional safety implications associated with it.

Are there any other initiatives in place other than the liberalized Drone Rules 2021 to achieve the target of making India a drone hub by 2030?

 

In furtherance to the initiative of the liberalization of the regulations governing Drones, the Indian government approved the Production Linked Incentive scheme (PLI) for drones and drone components in India. The net fund assigned under the scheme is Rs. 120 crores over three financial years.

It provides relaxed criteria for MSMEs and startups to encourage them to avail the benefits of the scheme. The rate of PLI is fixed at 20% of the value addition throughout the scheme. Depending on the value added by the manufacturer, their eligible PLI will be 20% of the addition. The minimum addition is set at 40% of the eligible sales turnover of the FY. Value addition is calculated as the eligible sales minus the eligible purchase cost.

It is the responsibility of the component manufacturers to show that the components are exclusively used in manufacture of drones. The scheme is for three years from 2021-2022 . The amount will be disbursed in the subsequent financial year to which it is claimed . An applicant is eligible for three consecutive years but up to FY 2023-2024.[5]

 

What steps are being taken for traffic management and avoidance of collision between manned and unmanned aircraft?

 

On the 25th of October the Unmanned Aircraft System (UAS) Traffic Management (UTM) policy framework was published by the Ministry of Civil Aviation. To achieve UTM-ATM (Air Traffic Management) interoperability and integration, the policy suggests aligning with the framework of the International Civil Aviation Organisation for UTMs. It invites studies/ proposals on real -time tracking mechanisms as real -time identification and tracking (RIT) via Bluetooth or wifi is not practical owing to the low operational range. As per the policy, all unmanned aircrafts may implement RIT via network for successful separation from manned aircrafts. However, it does recognise that this facility will not be available in areas without telecommunication network.

 

The Future Lies in the Sky

 

The new drone rules have liberalised and simplified the regulations pertaining to drones. Instead of having all the regulations and certifications within these rules, powers have either been delegated or separate authorities and platforms have been established to deal with specific issues. The new rules also facilitate self-certification and self-monitoring as well as provide an easier process for transfer and deregistration. Further, they have done away with the approvals required for unique authorisation number, unique prototype identification number, certificate of conformance, certificate of maintenance, import clearance, acceptance of existing drones, operator permit, authorisation of R&D organisation, student remote pilot licence, remote pilot instructor authorisation, drone port authorisation etc. Forms have been reduced from 25 to 6.  There is no specific criteria or approvals for drone ports, instead, the current rules have proposed that a policy be developed with a framework for corridors for the delivery of goods.

All these accompanied with the considerable reduction in the fees with respect to the remote pilot license and other registrations/certifications (wherever applicable) will set new grounds and open up a plethora of opportunities for start-ups, SMEs and research organisations who want to venture into the field of aviation, avionics and related interests. As an effect, the future will soon see Amazon, Zomato deliveries through drones, site verification for insurance organisations, crime patrolling, disaster assessment etc. eventually, as Union Minister for Civil Aviation, Jyotiraditya Scindia told, make India a global drone hub by 2030.

The future lies in the sky and beyond, and it is going to get crowded than ever!

References 

[1] https://www.thehindu.com/news/national/two-explosions-rock-technical-area-of-jammu-airport/article34997389.ece

[2] https://dronenlisting.dgca.gov.in/

[3] https://www.dgft.gov.in/CP/?opt=itchs-import-export

[4] F.No.05-13/2014-AED Vol. IV dated 27th August, 2018.

[5] https://egazette.nic.in/WriteReadData/2021/230076.pdf

Image Credits:

Photo by Dose Media on Unsplash

The new drone rules have liberalised and simplified the regulations pertaining to drones. Instead of having all the regulations and certifications within these rules, powers have either been delegated or separate authorities and platforms have been established to deal with specific issues

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