The Commercial Reality of Delivery of E-Commerce Consignments by Drones in India – Legal Perspective
The ‘Last Mile’ delivery of packages without having to go through the hassles of the traffic of a busy city and the resultant delay, is a huge motivating factor for e-commerce service providers to switch to delivery by drones. It improves the efficiency of the business by cutting down the time spent in effectuating the logistics of delivery to end-customers, however, the anticipated efficiency of the use of drones, could be undermined in effecting compliance with the regulatory requirements for operating drones in India. This article examines the impact of the current regulatory ecosystem on e-commerce entities from a commercial perspective, without delving into specific legal issues concerning privacy and information technology. It scrutinizes whether the Draft Unmanned Aircraft System Rules, 2020 (“Draft Rules”) proposed to be issued by the Central Government of India pursuant to the Aircraft Act, 1934, addresses the shortcomings of the present-day regulatory regime to facilitate seamless integration of drones into the e-commerce industry. Considering the fact that drones involved in the delivery of packages should have the capacity to support the weight of the packages, it is presumed that such drones would weigh more than 2 kilograms (including the weight of the packages themselves) and hence the regulatory framework governing Nano (weighing less than 250 grams, including the weight of the components that are not essential for flying) and Micro (weighing between 250 grams and 2 Kilograms, including the weight of the components that are not essential for flying) drones are not considered for the purposes of this article.
The Remotely Piloted Aircraft System
Drones, legally referred to as Remotely Piloted Aircraft (“RPA”), are unmanned aircraft that are remotely piloted from a remote pilot station.[i] The RPA, along with the requisite command and control links as between itself and the remote pilot station and other components, as may be required for the operation of the RPA, constitute the Remotely Piloted Aircraft System (“RPAS”).[ii] In India, drones weighing 250 grams or more cannot be operated, unless a Unique Identification Number (“UIN”) is allotted to it by the Directorate General of Civil Aviation (“DGCA”) through its Digital Sky Platform.[iii] Furthermore, the Civil Aviation Requirements on Requirements for Operation of Civil Remotely Piloted Aircraft (RPAS) issued pursuant to the Aircraft Rules, 1937 deals with the issuance of Unmanned Aircraft Operator Permit (“UAOP”) and stipulates other operational requirements concerning civil RPAS, which are briefly discussed hereunder.
In terms of the aforesaid legal provisions, in order to be eligible to obtain a UIN, an e-commerce company, would have to ensure that it is registered in India with its principal place of business situated in India; and its substantial ownership and effective control is vested in Indian nationals, with its chairman and at least two-thirds of its board of directors being Indian citizens (“Residence and Ownership Requirement”).[iv] Furthermore, e-commerce companies would also have to obtain security clearance from the Ministry of Home Affairs before they can apply for UIN.[v] If the said entity procures drones from India, it must ensure that such drones have been accorded Equipment Type Approval (“ETA”) by the Wireless Planning and Coordination Wing of the Department of Telecommunication (“DOT”), whilst for drones imported from overseas an ETA would have to be obtained from the DOT, after which applications would have to be made to the DGCA and the Directorate General of Foreign Trade (“DGFT”) for import clearance and issue of license for import, respectively.[vi] The ETA limits the operation of drones, within the de-licensed bands of radio frequency allotted by the DOT.
E-commerce entities would have to additionally obtain UAOP, also issued through the Digital Sky Platform, which would entail submission of Standard Operating Procedures containing information regarding flight plan, take-off and landing, communication link, safety, and security aspects, etc.[vii] Presently, RPAs would have to be operated within the Visual Line of Sight (“VLOS”), i.e. within the unaided visual contact range of a remote pilot.[viii] Furthermore, there are additional operational requirements that call for flights only during daylight and under certain climatic conditions and visibility and require pilots to operate only one RPA at a time.[ix] As regards safety, drones would have to be equipped with geo-fencing capability[x] (i.e. technical requirement restricting operation within specified geographical boundaries) and collision avoidance technology[xi], periodically maintained[xii] and the remote pilot operating such drones should have undergone ground / practical training from a Flying Training Organisation approved by the DGCA[xiii].
The Unmanned Aircraft System
The Draft Rules, issued by the Ministry of Civil Aviation, has proposed to regulate the RPAS, under the broader canopy of Unmanned Aircraft System (“UAS”) which comprises of RPAS, Model Remotely Piloted Aircraft System (“MRPAS”), and Autonomous Unmanned Aircraft System[xiv]. Whilst MRPAS are RPAs sans payload operated for educational and experimental purposes within the VLOS, Autonomous Aircraft do not require intervention by pilots in their flight management.[xv]
The Draft Rules essentially revalidates the position that e-commerce entities would have to be authorized to operate drones in India and prescribe procedures and requirements for authorization of drone owners, operators, manufacturers, traders, importers, and of drone operations, thereby tightening the regulatory grasp on the operation of drones in India.[xvi] For furnishing authorization to entities, the Draft Rules prescribe the same Residence and Ownership Requirements as contained in the Civil Aviation Requirements, 2018 (“CAR”) on the operation of civil RPAS.[xvii] Additionally, the Draft Rules lay down the framework for licensing and operation of drone ports and the management of UAS traffic in India.[xviii] Furthermore, the Draft Rules mandate maintenance of third-party insurance by operators to cover liability that may arise due to mishaps and accidents caused to person and/or property due to drone operations, which is similar to the insurance requirements under the Motor Vehicles Act, 1988.[xix] The Report of the Working Group on Remotely Piloted Aircraft Systems/Drone Technology highlights the various risks associated with the operation of drones and examines the insurance requirements of operators and owners of UAS in India.
The Regulatory Regime
It is evident from the aforesaid regulatory regime that e-commerce entities would be subject to increased costs of investments (in the UAS ecosystem) and added compliances (imposed by the UAS legal framework), some of which may inhibit the induction of drones into the delivery chain of e-commerce entities. These legal impediments and plausible solutions thereto are briefly discussed herein below –
The VLOS Requirement
As per the CAR, RPAs would have to be currently operated within the unaided visual line of sight of a remote pilot. The term unaided indicates within the range of the naked eye of a pilot, unsupported by technological devices. This, however, defeats the purpose of investing in drone technology to avoid manual delivery, as the range of the naked eye is limited and would necessitate the presence of a person very close to the site of delivery. Fortunately, the Draft Rules appear to have addressed this issue by prescribing operation within VLOS only in relation to MRPAS.[xx] The Draft Rules apart from specifically defining Beyond Visual Line-of-Sight (“BLVOS”) Operation as operation without visual reference by a remote pilot or observer[xxi], does not specify that RPAs would have to be operated within the VLOS.
The Residence and Ownership Requirement
The Residence and Ownership requirement as contained in the CAR and proposed to be retained in the Draft Rules could impede overseas e-commerce entities from owning and operating drones in India.[xxii] A plausible solution to this issue would entail such entities relying upon local UAS operators to provide them with drone operation facilities to effect deliveries to their customers. This may be an added cost to such e-commerce entities, and would have to be evaluated before being adopted.
The No Permission, No Take-Off Requirement
The Draft Rules[xxiii] prescribes that permission would have to be obtained for every flight of a UAS and stipulates that flight logs in relation thereto would have to be furnished after each such flight. This obligation could impact the efficacy of the delivery system but is essential for managing UAS traffic in airspace and avoiding accidents. Issue of pre-scheduled permits in advance (for example, the day before actual flights) could be a solution to this issue.
The One Person One Drone Requirement
In terms of the CAR, a person can operate only one drone at a time.[xxiv] This again may not be suitable to the business requirements of e-commerce entities. However, the Draft Rules appear to have addressed this concern by not retaining this provision.
Geo-Fencing and Geo-Caging
The Draft Rules impose obligations on the operators to ensure that the drones are operated in accordance with the authorized flight plans and there are no deviations therefrom.[xxv] This requirement is quintessential to the safe and secure development of the UAS ecosystem. Furthermore, non-conformity with this rule could result in interference with commercial aircraft operations, resulting in violation of the Convention on International Civil Aviation. For this purpose, drones would have to be geo-fenced by means of a global positioning system and radiofrequency such that they cannot be operated in Restricted Areas and no-operation areas[xxvi]. Furthermore, to avoid deviations from approved flight plans, drones could be geo-caged, which essentially restricts operations to the inputted routes.
A review of the legal regime governing the operation of drones clearly depicts the nascent stage of the current law. Though the Draft Rules are a step forward in achieving the effective integration of drones in the delivery chain of the e-commerce industry, only with practical implementation, will the shortcomings of the Draft Rules come into limelight. The cost-effectiveness of complying with the aforementioned regulations and safety and security concerns would have to be evaluated thoroughly before this technology can be safely inducted into our daily lives. Having said that, though the laws are still evolving, the day when our skies will be filled with drones may not be far behind.
[i] Para 1.2, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[ii] Remotely Piloted Aircraft System, Para 2.2, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[iii] Rule 15A, Aircraft Rules, 1937.
[iv] Para 6.1, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[v] Para 6.2.3, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[vi] Para 5.1 & 5.2, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[vii] Para 7, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[viii] Para 12.2, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[ix] Para 12, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[x] Para 11.2, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[xi] Para 11, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[xii] Para 10, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[xiii] Para 9, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[xiv] Rule 3, Draft Unmanned Aircraft System Rules, 2020.
[xv] Autonomous Aircraft and Model Remotely Piloted Aircraft System, Rule 2, Draft Unmanned Aircraft System Rules, 2020.
[xvi] Part III, Draft Unmanned Aircraft System Rules, 2020.
[xvii] Rule 7, Draft Unmanned Aircraft System Rules, 2020.
[xviii] Part VII and Part VIII, Draft Unmanned Aircraft System Rules, 2020.
[xix] Rule 52, Draft Unmanned Aircraft System Rules, 2020.
[xx] Model Remotely Piloted Aircraft System, Rule 2, Draft Unmanned Aircraft System Rules, 2020.
[xxi] Beyond Visual Line-of-Sight Operation, Rule 2, Draft Unmanned Aircraft System Rules, 2020.
[xxiii] Rule 30, Draft Unmanned Aircraft System Rules, 2020.
[xxiv] Para 12.14, Section 3, Civil Aviation Requirements Series X Part 1, Air Transport, 2018.
[xxv] Rule 30(2), Draft Unmanned Aircraft System Rules, 2020.
[xxvi] Schedule VIII, Draft Unmanned Aircraft System Rules, 2020.
This post has been authored by Ms. Ramya Sankaran, Associate Partner at Gagrats Associates & Solicitors. She was assisted by Ms. Simran Sabharwal, a student at RGNUL, Punjab. This blog is a part of the RSRR’s Excerpts from Experts Blog Series, initiated to bring forth discussion on contemporary issues.