General Electric plans to double sourcing from India.

General Electric’s sourcing from India, which is at $ 2.5 billion currently, is likely to cross $4 billion by 2020. “We are growing in India like crazy. The future journey is to grow,” Danny Di Perna, vice-president, global strategic sourcing, GE Power, said. “Over the last 10 years, there has been a significant ramp-up of our activities in India in the manufacturing footprint. The acquisition of Alstom brought more business opportunities for growth in India, specifically the steam business,” Danny Di Perna said. India plays an important role for GE in sourcing for all businesses — oil and gas, power, transportation, aviation, and healthcare. GE’s first factory is operational in Pune, while the second one is coming up in Bihar for making locomotives. According to Di Perna, there are plans to take the overall GE sourcing to beyond $4 billion from the current $2.5 billion by 2020. GE’s global sourcing is worth around $50 billion and India accounts for 20% of this. GE Power spends $10 billion and would be sourcing around 20% of this, or around $2 billion, from India.

 About two-thirds of the sourcing spend in India is for India and one-third goes out of the country. “Local suppliers can become more competitive if we could bring more work that would be both for Indian consumption and export,” Di Perna said. “About 40-50 of the 600 suppliers in India have grown with us and then extended their relationship across the GE business. A lot of new suppliers are coming and they have a high growth rate, especially in aerospace. Today, GE Aviation is doing great work not only in our internal factories but also with our suppliers. There is an appetite to grow right now,” he said. GE Power sources raw materials steel, fabricated steel, shaped profile steel, pump, machined airfoils, solar inverters, transformers, connectors, engineered parts, and PCBAs, among other things. 

“The skill is there, so is the willingness to invest. There is capital in India, but it needs to get better in certain areas such as aviation. GE will support with engineering, offer capability in manufacturing, technology and digital by bringing in engineers and work developing with them. GE would bring in more business if they can do other adjacent products/parts and branch out,” he said. “This is a long-term relationship. GE is not going to leave them on the street because somebody in China offers a better price,” he added. 

Source: financialexpress.com