Wipro-GE Healthcare to invest Rs 8K crore to 'Make in India for the World'

This report has been updated

Wipro GE Healthcare, a leading medical technology, diagnostics, and digital solutions innovator, aims to increase localisation in manufacturing in the country from 50 per cent currently to 70–80 per cent.

This initiative comes alongside an announcement made on Tuesday regarding a fresh investment of Rs 8,000 crore in the next five years to bolster its focus not only on ‘Make in India’ but also on ‘Make in India for the World’.

The products slated for export include positron emission tomography-computed tomography (PET-CT) used for cancer diagnosis, CT, and magnetic resonance imaging (MRI) coils.

In an interview with Elie Chaillot, president and chief executive officer of GE Healthcare International, “‘Made in India for the World’ emerges as our new focus, with an aim to deepen our supply chain. Across our product range, the average localisation stands at 50 per cent, and we aspire to incrementally increase this figure by 10–15 per cent annually until reaching 70–80 per cent.”

 

Elaborating on the localisation drive, Chaillot notes that India is as competitive as China in terms of labour costs. However, importing components from China to India could prove more expensive, hence the preference for procuring locally in India.

Chaillot emphasises India’s existing scale, a factor enabling such high levels of localisation. This level of localisation is not feasible in many other countries due to limitations in scale or ecosystem — exceptions being China, possibly the US, and Japan.

“The Indian market is expanding. Despite Japan having a population of 120 million compared to India’s 1.4 billion, our addressable market in Japan matches that of India. Hence, India holds the potential for tenfold growth, positioning it as a global hub-maker,” says Chaillot.

Wipro GE Healthcare has identified over 15 countries for exporting its machines manufactured in India. These countries include Southeast Asia, experiencing single-digit growth, Eastern Europe, necessitating products with similar technology locally manufactured, the European Union replacement market, and the entirety of the Latin American market.

Chaillot sets an ambitious target, aiming for export revenues from India to double those from the domestic market.

Regarding efforts to reduce the high cost of MRI machines, limiting their penetration in India to single digits, Chaillot outlines two approaches. “We are utilising artificial intelligence to increase throughput, compensating for image quality without compromising it. Additionally, advanced technology is being employed to accelerate the MRI process, achieving the same output with fewer machines.”

When addressing the impact of US-China geopolitical tensions on investments in China, Chaillot acknowledges a wind-down of companies due to China’s global stance. However, he underscores the significance of both India and China as neighbouring economies. He points out that while India currently contributes a mid-single-digit share to the company’s revenue, excluding China and the US increases India’s share to 30–40 per cent.

FROM ‘MAKE IN INDIA ONLY’ TO ‘MAKE IN INDIA FOR THE WORLD’

·  The company aims to increase localisation from 50 per cent to up to 80 per cent

·  Shifting focus from ‘Make in India only’ to ‘Make in India for the World’

·  Regulatory clearances are being sought for exports to 15 identified countries, including Southeast Asia,           Eastern Europe, the EU, and Latin America

·  Efforts are underway to leverage AI to reduce the cost of MRI machines

·  Targeting exports to double the revenues from the domestic market