For us, India is becoming the world’s centre of gravity for innovation and production

U.S.-headquartered Fortune 100 multinational Honeywell is one of the few firms to have continued to invest in India even in the years before the NDA came to power and when other global investors had turned less than positive on the business environment. This year, it has invested $200 million to develop its largest engineering centre in the world at Bengaluru, where 6,000 of its 8,000 engineers in the country operate from. With a billion dollars in domestic sales and exports from its India operations, the company is set to accelerate its investment plans in India where its businesses are clocking growth in the region of three times the GDP growth rate. Vikas Dhoot spoke to Shane Tedjarati, Honeywell’s President for Global High Growth Regions to understand the company’s strategy. Edited Excerpts:

Indian corporations are yet to start investing, despite this government’s efforts to revive the business environment. What’s your assessment?

Sometimes, if you are too close to the centre of gravity, you may not feel it.

But for me, I have to say in ten years of working in India and more than forty years of visiting (I came here first in 1972 as a child), there have been times when there was a lot of hype, lot of excitement, and we have gone through those cycles. But in the past ten years, this is the time we are seeing a lot of renewed excitement, both with the local Indian businesses as well as the global MNC community. I see a renewed vigour. On the business side, India is growing exceedingly well for us.

Obviously, we are not impervious to the fact that India being India, things still take some time to unravel and to get going.

There’s a lot of engineering and talent here – India is one of the biggest exporters of talent for Honeywell. Some of our biggest leaders now come from India. The head of one of our biggest strategic business units is Rajeev Gautam and his next two lieutenants running multi-billion dollar businesses are also Indians, one of them home-grown from the Indian business.

Could you elaborate on what you mean by consistent?

Good or bad, the way the capital system was designed a couple of hundred years ago, it’s not my saying and I don’t like it – but capital is a coward. Over time, it finds the best and most efficient way to get a return for investors. Part of that cowardice of capital is looking for consistencies, reducing risks and getting returns.

My shareholders are not just Americans, they are everywhere. And If I tell them, I think I may give you good returns this year, but maybe I won’t, they are gonna flee. I have to be predictably able to say I have built a business for you and based on experience and consistency, I can deliver a good return for you. By the same token, it’s the same with countries as with companies. Today is certainly India’s time – it has been working for twenty plus years to build a foundation, but there’s still a lot to do. We can’t stop at getting 300 million Indians in an ‘okay’ position and let the rest be.

What’s next for Honeywell in India?

The last two years have been great for companies like ours that continued to invest even in the four years prior to that when not everyone was being very positive about investments in India. Even in the global financial crisis of 2007 to 2009 we did things differently than many of our peers. That gave us a great tailwind when 2009-10 came. We are seeing the same gain in India, we are investing in our biggest engineering campus in Bengaluru, continuing our capability building within India for global businesses as well as ‘East for East’ opportunities.

As a company, we want to have India as ground zero of innovation and production of the emerging new middle class products and services, to serve the Indian market and the emerging middle class coming up behind India in the rest of the world.

For us, India is becoming the world’s centre of gravity for that. We can do it today because we already have five major engineering centres with 8,000 engineers and seven manufacturing sites here. We have a supply chain here, sales and marketing. So we don’t have to lay the foundation. We are going to start full force.

Which other businesses are seeing growth? Can you share some details on your new investments here?

All our Indian businesses are growing healthily at double-digit rates. We are investing on our own, but also partnering with firms wherever possible. Over the last 12 months, we have ramped up to make India global centre for finance.

As we are growing, the emerging middle class product development, we need to continue to expand our manufacturing in the chemicals, oil and gas and automation and control business. Less than 15 per cent of our portfolio is directly related to oil and gas. Whether it’s Reliance Industries or other companies in the sector, they may not be investing billions in new infrastructure, but they want to run existing infrastructure more efficiently. I still believe we can grow 2x plus GDP growth. We are growing nearly 3x GDP in India. If there’s a slowdown we don’t pull out. Now it’s India’s time to accelerate growth.

Recommended for you