With the inauguration of its phase I of Pune facility, General Electric vice-chairman John Rice is confident of the India growth story. He says the work done in Pune exceeds his expectation and is the perfect example of what is possible under the 'Make in India' campaign.
He will continue to pay attention to what the government does with the 'Make in India' initiative and what the individual states do to support that initiative.
Below is the verbatim transcript of John Rice's interview with Shereen Bhan on CNBC-TV18.
Q: Let me start by congratulating you, your new facility in Pune is up now and been inaugurated by the Prime Minister, give us a sense of how confident you feel about the India story today on the back of the many initiatives that have already been announced by the government and the promises that are being held out?
A: We are feeling very confident. As we inaugurate phase I, we are starting to think about phase II. The work that we have done in Pune has exceeded our expectations, we love the quality of the team and the workforce and frankly we are optimistic, we think it is a perfect example of what is possible under 'Make in India'.
Q: You talked about phase II, if you can give us some colour on what phase II could entail, how soon will you get things started and what will that mean in terms of incremental investments?
A: We will start phase II this year, the planning is underway and incremental investments will probably be about 50 percent of what phase I was, so that will take us sub-close to a couple of USD 100 billion and as those of you who have seen the facility will see there is room for expansion past that. So we think the work they were doing at the facility has a very bright future and we don't know where it will end.
Q: So ballpark number that you can leave us with in terms of what we can expect incremental investments from GE to India over the next few years specifically as far as the manufacturing sector is concerned?
A: We havn't put a figure on that, we do look across all of our businesses and opportunities to expand, we manufacture in all of our businesses somewhere in India so we are quite happy with the footprint that we have and we are going to look for other opportunities to invest and we are going to pay close attention to what the government does with the Make in India initiative and what the individual states do in support of that initiative as we think about opportunities for additional investment.
Q: I would like to get your comments on clarifications that have come in recently from the government as far as the one-two-three agreement or the nuclear deal is concerned, the government has made it absolutely clear that there is going to be no amendment to the liability law but they have clarified positions as far as some of the contentious issues are concerned. I am sure your team in India has briefed you on those clarifications that have come in, how comfortable do you now feel with the term that the Indian government has put on the table as far as the nuclear deal is concerned?
A: We are certainly becoming more comfortable, we are very happy that the governments have had the constructive dialogue that they have had - the US and the Indian government and we are anxious for this process to move forward and be concluded. We believe that nuclear needs to be part of India's power generation future and we would like to participate.
Q: If I could get your specific comments on the clarifications that have come in and the government has proposed the creation of an insurance pool and there were reports suggesting that GE investing house were perhaps not on board entirely as far as the insurance pool plan was concerned, can you throw some colour on what is your position is as far as the insurance pool is concerned?
A: I would prefer not to comment on the specific discussions that we might have had with respect to this topic. We are encouraged by the progress and we are anxious to conclude and move forward and bid our nuclear projects.
Q: Just to take that forward, do you also now get comfort from the fact that the Indian government is clarified that suppliers of reactors in parts will not be directly liable, nor can they be sued by an Indian contractor unless it is provided for in the contract so unless there is a contractual obligation, the right to recourse in that sense has now been limited. Do you get comfort from that?
A: Do you get comfort from that, we are obviously working closely - our teams are working closely with their counterparts in both the Indian and the US governments, make sure we understand all the forms of clarification that go with that so like I said before, we are encouraged, we think there is a little more work to be done and we are hopeful that we can conclude this and move forward.
Q: What specific clarifications are you now waiting for and if I can ask you whether what you are hearing from the US government and what you are hearing from the Indian government is aligned because we have been short on clarity as far as the positions taken by both governments beyond saying that there has been a breakthrough and as the details now start to come in, there are concerns on whether both the positions that they are aligned, on the basis of your conversation that you are having with the US government and the clarifications that have been put on the table from the Indian side, is there an alignment of both those positions?
A: I think that appears to be but candidly I havn't been involved directly in the specific discussions. So I would prefer not to comment except to say that we are optimistic with the progress that has been made and we are hopeful that we can reach a conclusion that everybody is comfortable with so that we can move forward to bid our nuclear projects in India.
Q: Let me now talk to you about the other areas of opportunity and of course we have had this conversation in the past as well, we are now awaiting the railway budget and hopefully the government will put forward its blueprint on modernisation and what it intends to do in order to attract foreign direct investments (FDI) and private sector investments into the sector. Any updates from the government and how confident are you feeling about the railway opportunity in specific?
A: We certainly believe the government understands the need to modernise the railway and our interest in participating in that, we have made it clear that we are prepared to be an investor that we would be prepared to commit several hundred million dollars towards the construction of a locomotive assembly facility here in partnership with Indian companies.
Q: Are you happy, is your team in India happy with the pace of progress on matters related to the opportunities within the railway sector because there has been a lot of talk but perhaps tangible action on the ground hasn't taken off just yet, are you happy with the pace of progress?
A: We would like to see more progress faster for sure but again it is a new government, a new rail minister and I think they deserve some time to make the choices and determine the right course of action. Hopefully there will be some clarity coming out of the upcoming Budget, we are certainly anxious for that to happen and we would like to move forward. We have what I call healthy impatience for this project and we would like to see it happen.
Stay tuned for more…
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