9NOVEMBER 2024RISING INNOVATION & BUDGETS IN UAVS DRIVING DEMAND IN UTM MARKETSOUTBOUND TRAVEL CONTRIBUTED $2B TO OVERSEAS ECONOMY: RBIThe global unmanned traffic management (UTM) market reached a value of nearly $1.2B in 2023, having grown at a CAGR of 34.35 percent since 2018. The market is expected to continue its expansion, growing to $3.6B by 2028 at a rate of 24.60 percent. This upward trajectory is set to persist beyond 2028, with projections indicating that the market will reach $10B by 2033, growing at a CAGR of 23.55 percent from 2028. One of the most significant is the increase in global defense budgets, which is fueling investments in unmanned systems for enhanced surveillance, reconnaissance, and combat operationsThe historic growth of the UTM market has been driven by several key factors. Investments in infrastructure for smart cities, government initiatives supporting drone and aviation technologies, and a strong push towards digitalization within the aviation industry have all contributed to the market's rise. Drones have also seen increasing use in disaster management and relief operations, surveillance, and security applications..Despite the positive outlook, the market does face potential obstacles. Concerns over airspace congestion, particularly in urban centers where drone use is increasing, could slow growth. Additionally, budget constraints in certain regions may limit investments in the necessary infrastructure for managing unmanned aerial systems.Nonetheless, the rapid pace of technological advancement and the growing demand for safe, efficient drone operations suggest that the UTM market will continue to expand significantly in the coming years. In August 2024, Indians spent $3.2 billion overseas, with a significant focus on travel, overseas education, and family maintenance, as per Reserve Bank of India (RBI) data. Outbound travel alone contributed $2.01 billion, approaching the all-time high of $2.04 billion in July 2023, which occurred prior to the implementation of a 20 percent tax collection at source (TCS) on foreign remittances in October 2023.Despite the introduction of TCS, forex spending has gradually recovered after an initial drop. In fact, August's travel expenditures surpassed the FY24 monthly average of $1.4 billion, and spending on overseas education stood at $416 million, marking its highest point since January 2024. However, overall remittances in August 2024 declined by 5% compared to the $3.3 billion spent in August 2023.According to forex dealers, while remittances for education have stabilized, travel demand remains robust, especially with the holiday season approaching. The 20 percent TCS rate only applies to remittances exceeding 7 lakh per year, minimizing its impact on many travelers. An increase in independent travel to visa-free or simplified visa destinations in Asia has also contributed to the surge in travel-related spending.August's travel expenditures were 25 percent higher than July's $1.6 billion and well above the $1.2 billion average for the first quarter of the fiscal year.
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