Is the worst behind us in terms of disruptions resulting from the pandemic and have businesses returned to a normal level of operation?
I think the pandemic period of 2020 has been very difficult. Our clients delayed their projects and their investment decisions and that obviously had an impact on us. However, 2021 has seen huge successes for us. We have had tremendous success in military aviation. We manufacture the engine for the Tejas light combat aircraft. We supply this engine to Hindustan Aeronautics Ltd and they supply the aircraft to the Indian Air Force. So we had our largest order ever in GE’s 120-year history for GE military aviation. Military aviation has had historic success, commercial aviation has had historic success, our wind business, where we have technology specifically tailored to India, has also had good activity. So we had the best year ever. The potential for renewable energy in India is enormous and the demand in this segment will continue until 2030.
In addition, our healthcare business also performed well in 2021, not only due to pandemic-specific requirements, but also because the demand for other procedures, other diagnostics is increasing. The healthcare sector had a fabulous year and we exported 75% of wind turbine blades made in India.
Which segments will propel GE’s growth in the years to come?
The demand for renewable energy is real. The demand will be there. The focus will be on 24-hour hybrid power. Obviously there is more impetus to accelerate it because the Prime Minister wants us to reach 500 GW of installed capacity by 2030. Renewables continue therefore to be a great engine of growth. India will be by far the fastest growing aviation market. People will travel for business, leisure and vacation.
What gives you confidence that businesses will thrive without being hit again by a Covid surge?
I think gross domestic product (GDP) is going to be strong, investment is going to pick up. Government investments will resume as the covid situation and the global geopolitical situation stabilizes. Private sector investment will pick up. This is how we see the pandemic, the macroeconomics and the impact on us.
Has the Production Linked Incentives (PLI) program benefited companies such as GE as many activities are underway, funds are being released and companies are now bidding for projects under the program . How do you see these developments?
Absolutely yes. I’ll give you two PLI data points from our company. However, before that, we applaud the government for the PLI programs in the hydrogen space, in the battery space and in the electronics space, in addition to renewable energy and healthcare. We announced a few days ago an initiative with our joint venture with Wipro. We just need a proper policy framework and we are working in partnership with the Ministry of New and Renewable Energy for that. We will continue to evaluate this as an opportunity.
Do you plan to enter a new segment with the government’s focus on hydrogen?
You should look at the technology we are already interested in. It is in gas turbine technologies that we hold a leading position. Probably 80-90% of the gas turbines that are in India are GE gas turbines. We’ve done some big projects, so the capability of hydrogen as a fuel in our gas turbines is where we see huge opportunities. This is how we can certainly add value and accelerate the energy transition to hydrogen, because even today our gas turbine technologies use hydrogen as fuel. We continue to make improvements in this area because this technology evolves. If our gas turbine fleet promotes this and burns hydrogen efficiently, it will allow for a faster energy transition.
Does existing technology support the use of hydrogen in your gas turbines?
Yes. However, today if it is only partial, tomorrow (we have to look) how it can evolve, which will take you to the next level.
Do you see a model emerging in India on hydrogen?
I think there’s a huge political focus in the first phase that’s been launched, especially if you look at investments from global companies. I believe it will grow. We provide the technological capacity where our customers can use it in terms of hydrogen availability. I think things will go very quickly.
What would be your priority in terms of investments in India?
The government’s emphasis on renewable energy will help us to continue in wind, solar and hybrid around the clock. I think wind, solar and pumped storage would be areas where we would like to work because we have the right technologies for it. The third is transmission and distribution where you need a stable network.
The fourth pillar is the focus on hydrogen, enabling our gas turbine technology to burn more hydrogen. These are the broad areas that we consider most important to us.
Do you think the market is good for acquisitions maybe this year, next year, whatever space you operate in India?
Rather than making acquisitions a priority, I would mention that our acquisition of LM Wind Power in 2016 has added tremendous value to our onshore and offshore ecosystem. Plus, it’s allowed us to export to global customers, and the beauty is that it doesn’t just serve GE. It also serves other wind turbine manufacturers. It is the oneness of power. We have kept its identity and independence so that it also serves other wind turbine manufacturers. So making this operation more efficient, adding design and manufacturing capabilities makes more sense. I will not speculate on acquisitions.
You now have 10 companies in India and only two are listed. Do you plan to list more entities as you expand your operations here?
Globally, a public announcement suggests that by early 2023 healthcare will become a separate independent listed entity and by early 2024 all of GE’s energy businesses will become an independent listed company in stock exchange. The third company that will remain would be aviation. So I think that’s the great strategic transformation that the world’s population is going through. In this transformation, it may not be prudent to limit oneself to India. Anything that will be decided, and it’s not decided at the moment, will definitely have a roster for us in the Indian market as well.
What are the areas in which GE wishes to remain invested?
We remain very strongly committed to onshore wind power. We invest and bring the best solutions in our technological research center in Bangalore. So this is an area where we are very proud to tell you that our 2.7 megawatt 132 meter wind turbine is fully dedicated and designed for Indian wind conditions to deliver the best cost. It is a data point. The second data point is that we have had a technology design center in India for 15 years. We design technologies for the world, not just for India. So those are the areas in which we continue to invest. Another opportunity that we mentioned concerns the hybrid architecture. We remain invested in it. We provide digital solutions for the network. These are the areas in which we are committed to staying invested.