Buoyed by the power sector reforms brought-in by the Centre, global leaders look towards India as a promising destination for energy generation, distribution and automation sectors. Electrical equipment and automation major ABB spots new avenues opening up in India as it bets big on the next wave of growth in sectors such as sustainable solutions for energy and Internet of Things. Frank Duggan, Chairman of ABB India Board and President of ABB Asia, Middle East and Africa and Sanjeev Sharma, CEO, Country Managing Director, ABB India spoke to BusinessLine about the emerging opportunities in Indian market and the challenges. Edited excerpts:

How sustainable do you find the current government's reforms in the power sector in the areas of generation, transmission and distribution?

Frank Duggan: There has been more focus over the years on power generation. We have seen a shift in generation from coal to now evolving renewables, wind, solar, hydro, nuclear. We have seen quite some work, but more needs to be done. The more important area is taking the power to the users in a sustainable, reliable and robust way. There is still a challenge of how to build a T&D system that is sustainable to the future. The T&D to become an absolutely critical part and the key to it is that distribution companies have a sustainable financial model, otherwise it will cause a blockage in the whole system.

Sanjeev Sharma: UDAY Scheme - launched by the government is to facilitate each of the distribution companies to readjust their balance-sheet. This is a big step forward and there is a number of states, who have shown good progress in that area and that will unlock new potential.

What, according to you, is still lacking and poses a challenge for the sector to grow?

Frank Duggan: We still see a lack of incentive in capital investment from the industries. The government continues to invest in large infrastructure projects. We would like to see more investments in the infrastructure. But there has to be a component in the industry as well to start significant investment in expanding capacities. That is still a bit sluggish.

What are the areas of opportunities for ABB in the current Indian energy scenario?

Frank Duggan: At ABB, we are well ahead of Make In India. In Vadodara itself, we already have 17 factories. Throughout India we have 40 factories, having close to 10,000 employees. Many of them have high-end jobs in R&D, manufacturing, engineering and services.

A big portion of our investments in R&D will be shifted in the area of Internet of Things (IOT), although we will continue to do traditional things.

As a part of our recently concluded capital markets day, we had some interesting numbers. Today between ABB and Our partner Microsoft has more than 70,000,000 digitally enabled devices connected worldwide. With renewed interest in establishing manufacturing, India is poised to leapfrog generations of industrial technology and can play a large role in realising this transformation to digital factories. And ABB, with its leading technologies and vast installed base in the country, is very well positioned to partner in this transformation.

Sanjeev Sharma: Currently, 50 per cent of total solar energy in India which is about 8.3 GW is powered through ABB. Our view always is to wait and watch. We are a long term player. The Indian economy today it is about $2 trillion, which is about 6th or 7th in the world. 175 GW will be added into renewable at 2030, renewables will form 40 per cent of India's energy.

What kind of capex plans you have laid down for India in the coming years?

Frank Duggan: We have more plans (of investments) in Vadodara. There are two firm plans on the cards for the expansion. We have met the State minister today and exploring government support in various areas. The new projects will be essentially in the areas of power. In all, our mission is to Make in India for India and India for the world.

Sanjeev Sharma: We are manufacturing in India for the last 60 years. We enable other companies of Make in India - Our technologies increase energy efficiency. ABB India represents about 4-5 per cent of the total ABB Group. ABB Group spends about $1.5 billion every year in R&D. ABB’s biggest R&D centre is in Bengaluru. Once we bring cutting-edge technology to India, our first intention is to localise. ABB India exports to about 100 countries.

We have been consistently investing $100 million every year as part of our expansion. Our portfolio is wide including the 1200-KV, switch-gear and sockets - complete electrical portfolio and automation.

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