Infra MNCs like GE, ThyssenKrupp willing to 'Make in India', but waiting for better business environment

MUMBAI: The Narendra Modi government's `Make in India' campaign has got the attention of several infrastructure and engineering multi nationals including GE and ThyssenKrupp, but they are waiting for the initiatives to improve business environment on the ground before bringing in big investments. Some multinationals have already told their Indian arms to scout for acquisitions and business opportunities while some others are looking at making an entry into the country, according to consultants and industry officials. They are waiting for the government initiatives to reflect as ground reality to take the plunge.

"We are hearing of a lot of initiatives being taken but they are yet to translate into ground reality," said Banmali Agrawala, president and chief executive officer at GE South Asia. "India has always had a massive demand and if the issues are streamlined then the potential that we see today can become a reality. Global companies would then re-look investment plans and bet on India," he told ET.

Besides the ' Make in India' initiative, another factor that makes infrastructure multinationals turn to India is that their home economies are struggling.

Executives from the industry said that several MNCs have internally communicated that they are keen to expand in India.

"Of course, back home, our headquarter in Essen recognises the importance to be part of a fast-growing economy and there is quite an excitement to partner this growth," said Michael Thiemann, CEO, ThyssenKrupp India.

But, he added, "It is too early to determine the effectiveness of the new reformist government's initiatives in the infrastructure sector. There is a strong belief in this government and its 'Make in India' is the right call." There are also companies looking to revive their India plans after putting them off due to economic slowdown and lack of policy initiatives.

Riding on the infrastructure boom in India three-four years back, several global power utilities had made plans to enter the market and some even posted expats to hunt for opportunities, including M&A deals. But the sector was hurt due to the economic slowdown at a time when it was grappling with its own inherent problems such as rising costs, fuel scarcity and issues in land acquisition, among others, and new entrants stayed away. Companies like Germany's E.ON closed their offices.

But the new government and Modi's overseas trips have put the country back on their radar.

"We have seen fresh inquiries from clients for India. Some companies from the US, Europe, Gulf and even China are looking for the first time, while some other MNCs that had shut offices here are considering re-entering," said Vinayak Chatterjee, chairman, at infrastructure consultancy Feedback Infra.

"They are looking at scaling up business through acquisitions and greenfield growth," he added.

Multinationals ET spoke to said they have not yet increased their investment plans in India significantly but they will respond quickly as soon as they see recovery in the market. Agrawala of GE said, "Every country in the world wants to reduce their costs, so India's biggest advantage is not that it is low cost. The huge demand within the country is the biggest advantage."