Why Drone Delivery FAILED in India?

00:00 - Intro
01:05 - Types of Drones
01:59 - Economic Reasons
04:45 - Regulations
05:50 - Other Reasons

In 2013, Jeff Bezos, the CEO of Amazon, announced a groundbreaking plan for 30-minute deliveries using drones, capturing global attention and sparking imaginations about a future filled with flying drones performing various tasks. This announcement also inspired many in India, leading to the emergence of numerous drone startups aimed at developing and applying this futuristic technology within the country. However, despite the initial excitement, almost a decade later, drone delivery has yet to become a reality in India or elsewhere.

The Promise of Drone Delivery
Drones, often classified by their design and applications, fall into three broad categories: military, civilian/recreational, and enterprise/business use, with delivery drones belonging to the latter. The idea behind using drones for delivery, as proposed by Bezos, was based on two key factors: speed and cost efficiency. At the time, typical delivery times in the United States ranged from 4-5 days, with expedited services like Amazon Prime offering two-day delivery. Additionally, the shipping costs were significant, averaging between $4-6, which could constitute about 20% of the order value. The concept of using drones aimed to cut down both the delivery time and costs significantly.

Why Drone Delivery Makes Less Sense in India
1. Economic Viability
While the drone delivery model seemed feasible in the US due to high delivery costs and long wait times, the economic dynamics in India presented a different scenario. Delivery costs in India are much lower, primarily due to low wages. A delivery in India can cost as little as 40-50 INR (approximately $0.50), which is significantly less than in the US, even after adjusting for purchasing power parity.

Furthermore, the rise of 'quick commerce' in India has further reduced delivery costs and times. Unlike traditional e-commerce companies that use large warehouses on the outskirts of cities, quick commerce firms like Zepto employ a 'dark store' model, with numerous small warehouses located close to residential areas. This proximity drastically reduces delivery distances, often to just 1-3 kilometers, and delivery times to mere minutes, sometimes as fast as four minutes. This model has driven delivery costs down to as low as 20 INR (about $0.25). Given such low costs and swift delivery times, there is little economic incentive for both companies and customers to push for drone deliveries.

2. Regulatory Challenges
The economic argument is closely tied to the second major barrier: regulations. In India, the regulatory framework surrounding drones and aerial vehicles is stringent, largely due to safety, security, and privacy concerns. Drones could potentially be used for targeted attacks, malfunction and cause accidents, or infringe on privacy. Consequently, the Indian government had imposed a complete ban on private drone use for several years.

Although the regulations were relaxed slightly in 2021, permitting controlled drone operations, strict rules remain. India's airspace has been mapped into three zones: red (no-fly), yellow (restricted, requiring government permission), and green (free to use). For instance, in a city like Bengaluru, red and yellow zones encompass almost the entire urban area, leaving virtually no space for free drone operations. Hence, the regulatory environment remains a significant obstacle to widespread drone delivery.

3. Job Concerns
Another crucial reason why drone delivery has not gained traction in India is the potential impact on jobs. Currently, around 1.5 to 2 million people work as delivery personnel for various e-commerce and logistics companies, and this number is expected to triple by 2030. Introducing drones for deliveries could lead to substantial job losses, a move no government would support due to the socio-economic consequences. For instance, when asked about self-driving cars, Indian Minister Nitin Gadkari stated the government's reluctance to adopt technologies that could result in massive job cuts. Similarly, the government is unlikely to promote drone deliveries at the expense of millions of delivery jobs.

4. Urban Challenges
The final barrier to drone delivery in India lies in the unique urban landscape of Indian cities. Unlike the more organized urban environments in countries like the US, Indian cities are characterized by high population density, congested streets, and irregular layouts. These conditions make it challenging for drones to navigate and operate safely and efficiently. The complexity of flying drones in such environments further diminishes their practicality for delivery purposes.

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