Prime Minister Narendra Modi on Saturday urged US-based conglomerate General Electric (GE) to manufacture ships in India, as part of the government’s “Make in India” campaign.
Inaugurating GE’s first-of-its-type multi-modal manufacturing facility at Chakan, Pune, Modi also urged global investors to tap opportunities for defence manufacturing in India. The government last year raised the limit for foreign investment in the defence sector from 26 percent to 49 percent.
“India has huge potential in ship building and the steel manufacturing industry,” said Modi. He added that India is in a position to export defence equipment to other third world countries at cheaper-than-expected rates.
GE currently manufactures equipment like engines, which are used in ships, but does not manufacture ships in India.
The new $200 million, 250,000 square feet GE plant will manufacture products to service four different industries – wind power generation, aviation, oil and gas and rail transportation. It will employ 1,500 people. GE’s Vice Chairman John Rice said the plant has come up at a time when the spotlight is on manufacturing and the Indian government’s “Make in India” campaign.
“This is the time for phase II and we will be investing additional capacity to support our aviation, rail and diesel engine requirements,” Rice said. He, however, did not disclose the investments which will be made towards the next phase of expansion.
GE has 13,000 employees across India of which 40 percent are in technical positions. It has been present in India since 1902, developing technology and products across the energy, health care, infrastructure and financial services sectors.
Modi had met GE’s CEO Jeffrey R Immelt in September 2014 in the US where they discussed ways to further expand GE’s presence in India.
The Modi government is battling to revive growth for the Indian economy, which grew by just five percent – its slowest pace in a decade – in the fiscal year to March 2013. The government has forecast the economy to grow by 7.4 percent in the fiscal year to March 2015, according to revised estimates, which were released this month.
Though the market sentiment has improved since the Modi-led Bharatiya Janata Party took charge last May, foreign investments are yet to pour in, in a major way.
India ranks a poor 142nd (out of 189 countries) on the World Bank’s Ease of Doing Business Index. This is 52 places below China and 32 below Brazil. Modi wants to bring India to the 50th position.
The government has eased foreign investment limits in real estate, insurance and defence, but easing of labour laws and a boost to infrastructure spending is required to revive growth. During US President Barack Obama’s recent visit to India, Modi made a strong pitch for attracting big-ticket investments from US firms into India.
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