GE plan $6 billion rural push

GE India, the $2.8 billion industrial giant, plans to invest $6 billion till 2015 in medical systems, services and IT tailor-made for rural India. Also, GE, the parent company, is looking at making India the sourcing hub for aerospace parts and healthcare products and is in the process of developing a supply chain for this.

According to Tejpreet S Chopra, president and CEO, “We are investing $6 billion till 2015. Around $3 billion will be invested in medical systems and services that will address the requirements of rural India.

Another $2 billion will be spent to finance schemes for the information technology sector and rural India. The remaining $1billion will be spent on building awareness about new products and on research and development for a better future.”

The company aims to offer “value for money” products in an attempt to make healthcare cheaper while covering more people and enhancing quality. GE, therefore, plans to invest $6 billion by 2015 in new medical systems and services designed to drive down costs while expanding access and improving quality.

Simultaneously, GE Aviation, one of the world’s largest manufacturer of jet engines for both commercial and military aircraft, is looking at sourcing $100 million worth of parts from India over the next three-five years.

“We already have a sourcing team in India. Going forward, we are looking at sourcing most of our aerospace parts and healthcare products from India to reduce costs by 20-30 per cent. So,we are putting together a supply chain model,” Chopra said

Other aviation players looking at sourcing from India include Boeing, Airbus, Rolls-Royce and Pratt & Whitney.

According to official sources in GE India, Kearns Aeroproducts, one of GE’s Tier 1 supplier, has moved work to India from the US. It has set up a subsidiary in Chennai that could be a model GE could pursue. The move is expected to improve GE’s sourcing volumes from India.

GE Aviation’s global production is in the range of 2,500-3,000 engines.

It commands over 50 per cent of the aircraft engines market in India and supplies to Air India, GoAir, SpiceJet, Paramount Airways and Jet Airways.

GE Aviation may also manufacture military engines in India and is already working on some projects, including an engine for 126 fighters of the Indian Air Force.

GE India recently became the first company to be awarded validated end user (VEU) authorisation in India by the US Department Of Commerce. This would allow licence-free export of technology under export controls.

“We will look at sale of advanced security systems to the Indian Ministry of Defence and other Indian security organisations,” Chopra said.

GE is also increasing its research and development (R&D) presence and market focus in India, specially after the Indo-US nuclear pact and new governments taking over in both the countries.

Following this move, GE’s largest R&D set-up outside the US, the John F Welsh Technology Centre (JFWTC), in Bangalore will be able to receive certain controlled items from the US like advanced security systems, civilian aircraft technology, explosive detection equipment, and others, without separate licences.

Spread over 50 acres, JFWTC employs about 4,000 scientists and engineers working on cutting-edge technologies.

GE’s revenues in India are close to $2.8 billion. It exports over $1 billion in products and services and employs above 14,500 in India.