Don't see slowdown in India, our fastest-growing market: Roland Busch, Siemens AG's CEO

German engineering major Siemens is recording perhaps its best growth ever in India. The oldest multinational corporation in the country has been aggressively bidding for, and winning, contracts across segments, the latest being one for ₹26,000 crore from the Indian Railways. Roland Busch, Siemens AG's CEO, told Kalpana Pathak in an interview that the company is firing on all cylinders and that India is its number one growth market. Edited excerpts:

How significant is the India market for Siemens?
We recently did our five-year planning and we looked into the markets and market growth. India is number one in terms of growth. So therefore, we see a lot of momentum in the industrial, mobility, infrastructure and electrification space as India is very serious on driving renewables up. This is where we have a lot of business and local production.


The next thing is about manufacturing. India is attracting more and more manufacturing and higher value products, which require more technology. Then it is digitalisation. Our Indian customers are embracing new technologies, so we have a strong interest in making their production more digital and more automated. Therefore, the growth potential in India is tremendous. And the last few years have been really encouraging. We are firing on all cylinders. This is amazing.

How much will Siemens invest to sustain growth momentum? Will you be setting up new facilities?
Over the past five years, India was growing over 9% and going forward it would be in double digits. We are investing, of course, following the market and following the orders we get. We have more than 30 manufacturing sites, and we want to load them first before we invest in new expansions. But, just to give you an idea, over the last seven years, we invested more than a billion euros, and of the last seven years, three were in this high-growth mode. So, now you can do your own math on what we want to do going forward. But again, if we keep that growth rate, we'd definitely have to add capacities.

Will Siemens be increasing hiring in India?
We'd do it because we are growing. We are growing very fast, and I mean in the Q1, digital industries and smart infrastructure, they grew by 15% in revenue. So, therefore we have a growth momentum, and we need people. We definitely will hire in the mobility space in India. We have to work on our 3 billion euro order backlog. We see a challenge in getting enough people and the right people... In India, we need to train people on new jobs, higher technologies, digitisation technologies. So there's another challenge, which is the labour market, so to speak, on both dimensions - quantity as well as quality. I'd like to believe India would be on the receiving end when it comes to diversification. If there's a good manufacturing base, you will see more and more high-value products, more complex products coming into India. And, you need technology and you need educated and trained people, and Siemens can do that.

How is Siemens dealing with high inflation and interest rates?
During the Covid crisis, there was a shortage of supply and a shortage of products. So therefore, our whole market, because it's in the industrial space, product space, the competitors of Siemens increased prices. We did that a little more carefully than our competitors because we take care of our customers also in difficult times. But the prices went up a bit. And this is due to the high energy prices and the supply chain problems which we had. Still, we had a little bit better delivering capabilities than our competitors, so we were able to capture market share in these difficult times. And going forward, I think the supply chain problems will ease. Therefore, we will see maybe a kind of relaxation. It's too early to say. Energy crises are still critical, particularly in Europe, but it will be better going forward.

Do you see a recession coming? Will there be layoffs at Siemens?
Talking about 2023, I don't see a recession at all. I mean in Q1, we increased our guidance for the year. So that doesn't look like a recession which is ahead of us. The combination of a huge order backlog and an easing supply chain is giving us such a tailwind that revenue comes, and we are delivering. At the same time, now on a global scale you see a very, very low unemployment rate, which means people are on the shop floor, they earn money, and they can spend money. 2024, I would be a little bit more cautious because again the high inflation rate (means) may be people are having less money to spend and if private consumption goes down then you have an impact. From Siemens' perspective, I'm also not so concerned because we are in the investment space. People talk about Germany going into recession in 2023, it doesn't look like that. Also, I don't see a recession in India at all.