In energy sector, we expect a lot of investment in equipment and services side in upstream sector in India. We will be exercising our capabilities with a combination of GE and Baker Hughes (which GE took over last year). Thermal sector has been soft to grow but the big focus has to be retrofit which will increase efficiency and life of the plants. On the gas-based power side, there is booming opportunity in Bangladesh. We see green shoots in India in gas-based generation, not big but small.
We are aggressive on renewable and have 100 per cent localised our solar manufacturing. We feel storage will play an important role. Having a macro long-term plan of for the grid so that renewables can be incorporated is something that we are advocating with the government. The only sector where growth was slow was wind where there was migration from feed-in tariff to tariff based regime. But, it, too, has picked up now.
What is the status of your aviation partnership with the Tatas?
We are bullish about aviation sector since India is the fastest growing market. We are working with the Tatas to localise LEAP engines. We are looking at using their platform for aviation and then use it as a feeder for defence business. With Make in India coming into play in the defence sector, we want to get ahead of the curve especially for single engine fighters. The Tatas will start manufacturing parts for out LEAP engine at their Hyderabad facility early next year. Both for air framers and engines, Make in India in defence will require 50 per cent localisation for which we will be ready and deployed.
GE globally is transforming into digital manufacturing company. How are you doing it here?
Big part of our business is technology push. There are emerging trends like advance manufacturing and use of 3D printing or additives. We see this as something that will make sense to sectors like aviation, automotive, health. We are offering industrial scale 3D printing of metals. The benefit of it is redesigning. It reduces complexity and cost, and increases reliability. The other aspect is digital, where we monitor assets we supply for the purpose of reliability and then redesign based on data. This is part of transforming all are businesses towards digital.
Do you think there is enough government investment and push in the sectors where your company is present?
The long-term trajectory is extremely positive from macro perspective. We are in all growth sectors except thermal. But I think investment in emissions will unlock growth there and if we get the renovation and modernisation off the ground.
In health, the new insurance scheme will help in putting investment in the health sector. We expect some movement later this year. This market grows every year. We are providing affordable products in the market. They were slow to start but now we are implementing 150 projects under PPPs with over 12 states in India. Such as Assam, West Bengal, Gujarat, Himachal Pradesh and Andhra Pradesh.
We would like defence business to move faster. No doubt there’s progress but should we do it faster? There is no doubt about it. On commercial aviation side, there are bottlenecks so more needs to be done. Regional airports and health need more injection (of funds). Rural electrification is another right step. What we need to ensure is that the pace at which we are executing, and that is with partnership between the government and the private sector, happens quickly.
Do you think the government has addressed regulatory and policy issues?
Broad reforms like GST are huge positives. There are some complexity in implementation. For instance, there is no GST in power sector but all equipment suppliers like us pay GST so that creates complexity. Things like that need to be simplified. With Insolvency and Bankruptcy Code, we are making a progress on stressed assets. The focus is to make sure that those assets find home and make progress.
We feel good about that progress has been made in ease of doing business but most of the focus has been on setting up business. We need to take more holistic approach on ease of doing business while industry is operating or moving goods and factories which is where labour reforms come in because if companies
invest in Make in India, they want to see more flexibility.
Foreign companies, and GE itself last year, have faced concerns on reversal of policies and contracts. Is that worrying?
We are mindful of all these things. Sanctity of contracts and stability of law and reforms are incredibly important in order to have confidence to invest in any country. When you deal with things that are retroactive in nature, it shakes your trust. It is not that the government is not aware. They are trying to make improvements.