Post-Covid, India has become a preferred destination for investments vis a vis China as global corporations see humongous potential for growth in an economy that is one of the fastest-growing.
There are companies, however, who have always been bullish about India over decades and have stepped up their pace of investments over the last five years or so with India becoming a key player at political and economic forums. Construction machinery maker UK-based JCB is one of them.
JCB, which sells one in two heavy earth moving and construction equipment in India, has been in the country since 1977 and last year invested around €100 million in setting up one of its largest plants in Gujarat. It has six manufacturing plants in the country, which employs half of the company’s total workforce. India accounts for about a fourth of the company’s global revenues of £4.4 billion in 2021. Between 2001 and 2014, nearly 38 per cent of its total investments across the world were in India and that pace has accelerated over the last five years.
In a recent interaction with Indian media at the company’s headquarters in Staffordshire, UK, JCB’s chairman and owner Lord Anthony Bamford waxed eloquent on India and its prospects.
Following are edited excerpts from the interaction.
How do you assess India as an investment destination in general?
I am wholly biased for India, probably more than many of my colleagues in business. India is a wonderful country and you have got so much going for you. Your country is expanding, and so quickly and it is partly because of the population and partly because of the wonderful young people you have too. More than anything it is the enthusiasm and vitality of your country and more with luck, but definitely not being clever, we set up operations there. I like the fact that your common language for business is English... how useful is that for us and it is also useful for running businesses in India. It helps enormously in engineering and our place in Pune, where our design centre which has 800 engineers. The country is going somewhere, and we continue to invest. I think you are gradually taking over the world... I back India more than China.
JCB has already invested a lot in India. Would you be continuing your investments at the same pace?
We first started our business (in India) in 1977. We are investing all the time in India - of course, we look at other areas too, but proportionately we are investing more in India than in other parts of the world. Once you have a big factory, it’s what you put inside, that is where the real investment is. Our plant in Gujarat, which opened last year, has 50 per cent female employees, which is rare in engineering.
JCB has been working on hydrogen engines. When do you plan to start commercial production and bring hydrogen-powered machines into India?
We are hastening slowly. India is fully integrated with us in our program. As yet we are not making the engines, we are developing them. Once we develop them fully, they will undoubtedly come to India, but the fuel needs to be made.
We make engines in India; every day we make 200 engines in Delhi. If we are making commercial hydrogen engines, we would be making them in India as well. I can’t tell you when that is because the biggest single problem with a hydrogen engine is, where do you get the hydrogen from? You split H2O then you get hydrogen. It is a costly, complex process but very feasible. In the beginning of last year, we had a hydrogen meeting; it was a roundtable. People like the Ambanis and Adanis were at the meeting. Your nation imports so much of your fuel requirements, you’ve got to do something. The whole world is against fossil fuels; electricity is part of the solution but not the only solution. Hydrogen has so many benefits. To make hydrogen in quantity needs the sun – which country in the world has the sun 365 days a year? And you need water ... you are surrounded by water. I think your country could easily be one of the leaders in producing hydrogen... you have to do it. You have to find a solution. As a nation, you are dependent on importing fuel from some countries that are not very reliable.
(The writer was in the UK recently at the invitation of JCB)