Is the worst behind us in terms of the disruptions resulting from the pandemic and are businesses back to normal levels of operations?
I think the 2020 pandemic period was very difficult. Our customers delayed their projects and investment decisions and that obviously had an impact on us. However, 2021 saw huge successes for us. We had fabulous success in the military aviation business. We make the engine for the light combat aircraft Tejas. We supply this engine to Hindustan Aeronautics Ltd and they supply the aircraft to the Indian Air Force. So, we had our biggest ever order in GE’s 120-year history for GE military aviation. Military aviation saw some historical success, commercial aviation saw historical success, our wind turbine business where we have technology specifically suited to India, also saw good activity. So, we had the historically best year. The renewable energy potential in India is enormous and the demand in this segment will continue until 2030.
Besides, our healthcare business also did well in 2021 not only because of the pandemic-specific requirements but also because the demand for other procedures, other diagnostics are increasing. The healthcare business had a fabulous year and we exported 75% wind turbine blades manufactured in India.
Which segments will propel growth for GE in the coming years?
Demand in renewable energy is for real. The demand is going to be there. The focus on the round the clock hybrid power is going to be there. Obviously, there is more impetus on accelerating it because the prime minister wants us to achieve 50-GW installed capacity by 2030. So renewable energy continues to be one big growth engine. India is by far going to be the fastest growing aviation market. People will travel for business, leisure, and vacations.
What gives you confidence that businesses will thrive without being impacted again by a Covid surge?
I think gross domestic product (GDP) is going to be strong, investment will pick up. Government investments will pick up as the covid situation and global geopolitical situation stabilizes. Private sector investments will pick up. That is the way we see the pandemic, macro economy, and the impact on us.
Has the production-linked incentive (PLI) scheme benefited companies such as GE because a lot of activities are happening, funds are getting released, and companies are now bidding for projects under the scheme. 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 schemes in the hydrogen space, in the battery space, and in the electronics space, besides renewable energy and healthcare. We announced a few days ago an initiative with our joint venture with Wipro. We just need an appropriate policy framework and we are partnering with the ministry of new and renewable energy sources for that. We will keep evaluating that as an opportunity.
Are you thinking of entering into any new segment with the government’s focus on hydrogen?
You should look at the technology where we already have interest. It is gas turbine technologies where we have a leading position. Probably 80-90% of gas turbines that are in India are GE gas turbines. We have done some large projects so the capability of hydrogen as a fuel in our gas turbines is where we see tremendous opportunities. That is the way we definitely will be able to 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 that area because this technology is evolving. If our gas turbine fleet promotes it and burns hydrogen fuel efficiently, it will allow faster energy transition.
Does the existing technology support the use of hydrogen in your gas turbines?
Yes. However, today if it is just partial, tomorrow (we must look at) how it can scale, which will push you to the next level.
Do you see a model emerging in India on hydrogen?
I think there is a huge policy focus in the first phase that has been launched, especially if you look at the investments coming from global companies. I believe this is going to gain momentum. We are providing the technological ability where our customers can use it in terms of the availability of hydrogen. I believe things will work very fast.
What would be your emphasis in terms of investments in India?
The government’s focus on renewables will help us continue in wind, solar, and round the clock hybrid. I think wind, solar and pump storage would be areas where we would like to work as we have the right technologies for this. The third is the transmission and distribution where you need a stable grid.
The fourth pillar is the focus on hydrogen, allowing our gas turbine technology to burn more of hydrogen. These are the broad areas that we see as the most important for us.
Do you see the market being conducive for acquisitions maybe this year, next year, in whatever space you are operating in India?
Rather than seeing acquisitions as a focus, what I would mention is that our acquisition of LM Wind Power in 2016 added tremendous value to our onshore and offshore ecosystem. Also, it enabled us to export to global customers and the beauty is that it doesn’t serve only GE. It serves other wind turbine manufacturers also. This is the uniqueness of the power. We have kept its identity and its independence such that they also serve other wind turbine manufacturers. So, making that operation more efficient, adding capabilities of their design and manufacturing makes most sense. I will not speculate on acquisitions.
You have 10 businesses now in India and only two are listed. Are you looking at listing more entities as you grow operations here?
Globally there is a public announcement that suggests that by early 2023 healthcare will become a separate independent listed entity and by early 2024 all energy businesses of GE will become an independent investment grade listed company. The third company that will remain would be aviation. So, I think this is the large strategic transformation that the global population is going through. In that transformation it may not be prudent to just look at India. Whatever gets decided, and it is not decided as of now, will definitely have alignment for us in the India market as well.
What are the areas where GE will like to remain invested?
We continue to be very strongly committed on onshore wind turbines. We invest and bring the best solutions at our Technology 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 completely dedicated and designed for Indian wind conditions to deliver the best cost. That is one data point. The second data point is that we have a technology design center in India for the last 15 years. We design technologies for the world, not only for India. So, these are the areas that we continue to stay invested in. Another opportunity that we have mentioned is about the hybrid architecture. We stay invested there. We bring digital solutions for the grid. These are the areas we are committed to stay invested in.