India is a shining star in the world economy and nobody can dispute that, says John Rice, Vice chairman of GE. Betting big on India, John Rice said, “We are not afraid to invest here. Between what we have spent in Pune, which is the most recent facility that we have built, to what we have announced in Bihar, we will have a billion dollars of investment in just two manufacturing facilities. We are always looking to invest here”.
In an interview with ET Now, Rice spoke of India’s growth prospects and the need to maintain that growth. “If you look at the IMF global growth forecast it is 3%, and in the case of India it is between 6-7%. So India is one of the shining stars. I think there is nobody who disputes that. I think the question is what to do to maintain that growth in a world in which things are going to a little tougher and the markets that take exports from India are going to require a little bit less,” he said.
Asked about what India needs to do to maintain its growth, Rice said, “India’s economy requires that the companies here export for us, it’s what we have focused on. 50% of what we build in India gets shipped to other places, so by definition we are globally competitive here, and I think for India that model has to work for everybody. One of the things that I have spoken of with the government is the establishment of export credit facility.” “Many countries around the world have export credit agencies, we use them, other companies use them to expand export base in those countries. And I think if India were to implement something like that it would certainly help,” he said. “Many other markets that we serve for our products globally, the tenders require export credit financing, and so if we have to choose a country that has an export credit bank, this is the place to build it,” he added.
Watch: GE bets on India story
Asked if the lack of such a facility has been the reason why India’s exports have not grown, Rice said, “Having such a facility would help grow exports, I don’t know how much of a deterrent it has been, because there are other advantages in India in terms of cost and capability.” “But over time, labour cost is going to be less and less of an advantage and so having an export credit agency would help offset that,” he noted.
Also read: Why Canada’s Warren Buffett, Prem Watsa, wants Narendra Modi to be re-elected
Talking about the need to invest in infrastructure, Rice said, “Obviously investment in rail is an important aspect of bridging infrastructure deficit, but I would also point at the continuing need for electricity – basic things like electricity, healthcare, clean water. There are several hundred million people in India that lack access to electricity. For them to be productive and contributing members of the society, that has to change.” “And, if you compare that with a place like China, there is only a fraction of the Chinese population,” he added.
Recently, Prem Watsa the CEO and founder of Canada-based Fairfax Financial Holdings said that PM Narendra Modi is doing a great job and should be re-elected. “Mr Modi is a very hard working man. He has eliminated corruption at the top and I think he is going to do a wonderful wonderful job over the years. I am hoping he will be re-elected in a few years and re-elected again and India will be transformed during that time,” he told ET Now.
The Narendra Modi government has been working to position India as a leading destination for global investment, and the recent slew of reforms such as GST and Bankruptcy Law, apart from an improvement in the Ease of Doing Business rankings are some steps in the right direction. The endorsement from global and influential CEOs and top management may go a long way in attracting investment to the country.