Mumbai: For German multinational Siemens AG, India has always been the promised market. And with political stability and continuity at the Centre, the engineering giant is convinced that business-friendly policies will continue as before. However, Roland Busch, the company’s global CEO, would like to see a quicker conclusion of India’s trade talks with the European Union (EU).
“If I turn back the clock may be 10 years, India was always the promised market. I was always wondering when it would take off. I think it is a good government policy to invest in sustainable and future growth drivers of the economy,” Busch said in an interview.
Siemens is betting on automation and artificial intelligence-assisted industrial machinery in manufacturing, semiconductors and medium- and small-scale enterprises. “So, we are just basically building infrastructure first, energy infrastructure, and then manufacturing and high-tech manufacturing,” he said.
Busch spoke to Mint soon after a town hall with engineers at Siemens Ltd, the conglomerate’s Indian subsidiary. On Thursday, Siemens shares touched a lifetime high of ₹7950, marking an 112.43% return on investment over the past year.
India’s economic growth rate of 6-7% significant and speaks for itself; however, if the share of industry in India’s GDP grows from the current 17% to 25%, this would add a potential $1 trillion to the economy, he added.
In May, Siemens announced an investment of over ₹1,000 crore to expand two of its 32 factories in India, in addition to the capacity expansion at Kalwa and Goa in November 2023. Siemens, which operates in technology, manufacturing, industrial automation and rail transport, has invested over €100 million in India in FY24, and around €1 billion over the past 7-8 years, as the country renews and expands its infrastructure.
India growth
The formation of a coalition government at the Centre will not dent India’s growth trajectory, Busch said. “I do not see that this is a broken trend…I do believe it is great that the current ministers as for the relevant ministries are still the same guys in place.”
While Busch is optimistic about his company’s prospects in India, he’s concerned about the slow progress in finalizing the India-EU Free Trade Agreement (FTA). The Siemens boss pointed out that both sides may have to relax their demands to strike a deal quicker.
“Free trade agreements between India and Europe are at the top of my list, and this has been going on for ages, and we have not come to a conclusion here. We should make it easier… agree on certain base principles, and not on the full-fledged trade agreement, where every aspect is reflected,” Busch said.
One of the hurdles to an FTA could be the trend of “glocalization”, where the aim is to create jobs locally, Busch observed. “I speak now for Siemens, but also for other German or European companies; they are ready to do that, but may be not in the speed required.” However, he added that given the right timeline and level playing field, the issue can be resolved.
“I do believe Europe should also pull back a little bit on our systemic requirements, put it that way in free trade agreements and focusing on what’s important and that’s something that I believe Europe can do…may be requires compromises on both ends,” he said.
Busch also voiced concerns over extremist views across Europe and their impact on the economy, democracies, and innovation. “I am worried about extremism and the harm it does to democracies, liberal markets and systems. These markets and democracies live from tolerance, openness, equality, and the like. So, therefore, and also speaking from an innovation-driven company, innovation happens in diversity with an open mindset. And if this is endangered, we do have a problem.”
The engineering conglomerate sees artificial intelligence as an opportunity and a threat, and sees technologies meeting the needs of an ageing labour force globally. Like other business houses, Siemens has also seen a labour shortage in India.