 "Sanjeev Sharma")
ABB India and the ABB Group hope to benefit from the Make In India initiative to increase their presence in and make this country their manufacturing and services hub for global markets. ABB India Chief Executive Officer and Managing Director Sanjeev Sharma tells Sanjay Jog he expects a fair policy in terms of the tax regime and how incentives are provided for manufacturers to participate and keep raising the standards of acceptance of technology. Edited excerpts:
What are your expectations from the Union Budget?
I believe Make In India is a great campaign for the supply side of the country, where there will be a large manufacturing base and a large number of people get employment in the manufacturing and services sectors. I expect the Budget to kick up the demand. We need to create great supply but at the same time you have to give a lot of incentives in the marketplace for consumers to kick up the demand. Two things are needed together, supply and demand, for the magic to happen.
We will like to be a fair participant in the marketplace and are not targeting any incentives, but expecting a fair flow of policy in terms of the tax regime, in terms of how incentives are provided for the manufacturers to participate and raising the standards of acceptance of technology, as India must absorb technologies at higher standards. We should not allow standards to be dissolved while we go into growth mode.
How is ABB equipped to be a leading player in India’s growth story?
ABB is a very long-term player and has been in India for 60 years. We have 10,000 employees. ABB Group is really positive on the ABB India story. Macro economic fundamentals are so positively inclined that every large company, such as us, will like to take leverage out of it. Domestic growth will sooner or later pick up because the government is working hard to put in place the right policies and institutional framework. That is what we are prepared for.
We have 39 factories in 12 locations in the country, which are producing products from ultra-high voltage 1,200 Kv transmission lines to the switches that go to residential space, including automation. Our backbone is already in place and with deeper engineering power, we will play it out for the domestic story.
At the same time, the backbone we have created will provide a big leverage for ABB India and the group to serve markets outside India. That is why the Make In India story is absolutely relevant for us. We can increase our capacities as growth and demand increase, both in the domestic and export markets.
I believe there is a positive momentum. Never before have we seen such brand building, Make In India has become a brand in itself. India can be a hub not only for the manufacturing products but on the supply and services side as well.
You should know, that we have 3,000 R&D (research and development) engineers in India. They are not developing products only for India but also for global business units.
We also have operation centres. For projects to be undertaken by ABB in the emerging and developed countries, all engineering services are supplied by India. The major component in soft supply will come from India. Manufacturing, R&D and engineering is a lethal combination to keep it sustainable for a very long time. It will play out for domestic innovation as we will adapt products for the country’s needs and also for the global markets.
What are ABB’s plans to increase its presence in infrastructure sector, especially power and transport?
I believe the government wants an industry to play their part to implement technologies and solutions. I see good airports and metro network coming up with the best technology. It takes time, whenever policy framework and financial models find their place, India picks it up and takes it forward.
Our play has been positive with the PowerGrid Corporation and the related government policy. ABB is developing high-capacity transmission lines and substations. One of them being the north-east Agra line to evacuate hydro power. We have created lot of capacities to produce transformers, switch gears, GIS (gas-insulated switchgear) and these are catalyst projects which encourage companies like us to develop products and increase capacities.
We do not give a forward looking statement. Right now, India is on the verge wherein the demand of products and services will grow. We are well prepared. We work with state utilities but are careful in terms of state electricity boards, which have carried out reforms, have a good track record of power supply and money collection. We have some good customers.
As far as metro rail projects are concerned, Metros in Delhi, Bengaluru and Jaipur are powered by ABB. We typically look into projects from the view point of how it is set up and how financial models are created. We are technology suppliers and will participate in bids, wherein the best of technologies and components go together. It depends upon the purchasing power of states.
Wherever there is demand for power, transmission, distribution, ABB is there. Metro rail is one of the areas where we are selective about the project.
The government is focusing on ease of doing business. Is it enough or needs further steps?
I believe it is positive. Whenever India changes policy framework, it takes some time for them to fall in place. Current strategy is to make it a high profile campaign to attract attention. It will play into the demand side. My sense is, the government is willing to change and adapt so that the continuity and ease of doing business would be high. I do believe they mean it. It is a matter of time, that the new policy framework and de-bottlenecking of existing policies goes on and show up demand.
