GE Plans Its First Multi Modal Manufacturing Facility in India

Jeffrey Immelt confident of 30% growth here despite some policy hiccups

Corruption scandals and concerns over a policy drift in India have not affected General Electric's investment plans as the world's largest conglomerate prepares to announce its first manufacturing unit in the country within three months, global CEO Jeffrey Immelt said on Monday. GE, which makes turbines for power generation plants and jet engines, besides running other businesses, will invest $50 million for setting up a multi-modal manufacturing facility to support its Indian business and exports. It has shortlisted two unnamed locations for the proposed unit that will primarily serve its energy business and GE may scale up the investment in this facility to $200 million, creating as many as 3,000 jobs, if it bags a long-pending tender for making locomotive engines in India.
Talking about opportunities for GE in India and whether the company has revised its business outlook for the country, Mr Immelt said, "Corruption is a bad thing but from a micro perspective in which we work in, India is still a good opportunity and we are investing here."
"In India you do learn to work in a certain context," said Mr Immelt who has been coming to India for the past 25 years and is visiting the country along with over three dozen top global GE executives for the company's corporate executive council meeting.
"On a micro basis, the elements of the country are still very strong," he said.
The global chief executive said GE is maintaining its target of growing its India business by 30% year-on-year as it sees lots of opportunities in selling equipment and services related to its energy business, demand for healthcare equipment business in its venture with Wipro and growing demand from aviation sector in India besides its financial services business.
But he also counted disappointment in the railway business. "It has been frustrating that it(locomotive plant) has taken so long," said the CEO of US-headquartered GE. "I would be very disappointed if in the course of my career we don't do something with locomotives in India," said Mr Immelt.
The company had in the past joined hands with state-controlled capital goods maker Bhel to bid for partnering Indian Railways for certain locomotive engine plants in the country. Some of the proposed projects have been pending for long, over decisions related to their location as well as the process of tendering by the government. Mr Immelt said GE is investing in a multi-business manufacturing facility which will allow it to localise production in a country whose main challenge remains infrastructure with electricity being a big part of that.
Although GE's total investment in India will be much more if it wins the bid for setting up the locomotive engine plant, it would also raise its initial investment four-fold in its proposed multi-business manufacturing facility to support the separate locomotive unit.
GE's total investment in India till date have been $200 million in various ventures and it employs 14,000 people in the country, including its employees in a research centre in Bangalore.
Sharing his views on the US and the global economy, the chief executive of GE said the US economy is getting more competitive.
"There's a point at which energy costs affects general economic growth. I don't know if we have hit that point yet," he said. Although he did not comment specifically if GE has given up any interest in applying for a banking licence as the Indian banking regulator is looking to ease norms for opening new banks in the country, Mr Immelt said the company's financial services arm GE Capital will be a more focused player.
He listed three lines of business, including equity investments and GE's existing credit card venture with SBI as key areas. "We would look at opportunities in enabling Indian multinationals to develop a GE Capital type of platform," Mr Immelt said.
Co Sees More Opportunities

• GE is maintaining its target of growing its India business by 30% year-on-year

• GE's total investment in
India till date have been $200 million in various ventures and it employs 14,000 people in the country, including its employees in a research centre in Bangalore