Not every foreign company is new to India, not Nestlé anyway!

In American today there is a bit of a rush toward India. “The 1.4 trillion dollar economy, growing at 7 percent. They like India. The last three US presidents have visited India, much more so than before.” All this is true.

But some foreign companies have been doing business in India since the early 20th Century. (And I don’t include the colonials of the British East India company).

General Electric supplied a hydroelectric plant in over a hundred years ago. And Nestlé began India operations in 1912.  According to Consumer Goods Technology,Nestlé’s first sales agents in India began work in Chennai and Kolkata in 1912. Today, the company directly employs 6,000 people in India  and tts products are sold in more than 3.5 million outlets across the country. Nestlé recorded sales of CHF 1.4 billion in India in 2010. Its most popular brands are Maggi, the country’s leader in instant noodles, and Nescafé instant coffee. I grew up in (admittedly tea-drinking)north India thinking that coffee and Nescafe were the same thing.

What this means to new entrants:

You’re the new kids on the block in India. Be prepared to pay your dues before you can succeed. In most markets in India, there are smart local and foreign companies who can run you over if you don’t go fully prepared and with good advisors.

January 19, 2012   No Comments

General Electric wins order for 2 turbine-generators from GMR Energy India

GMR Energy  announced the signing of a long-term service agreement with GE Energy for the expansion of the Vemagiri power plant in Andhra Pradesh.

Powered by two GE frame 9FA gas turbine-generators, the plant will produce over 768 MW of additional electricity by 2012. Under a 15-year contractual service agreement, GE will supply parts, services and repairs for the gas turbines. “By teaming up with GE, we are positioning the Vemagiri plant to make a long-term contribution to a modern and efficient energy infrastructure,” GMR Group CEO (Energy) Raaj Kumar said.

March 7, 2011   No Comments

To Samalkot from Schenectady, Obama mentions India again at General Electric plant

When I was part of the Presidential Executive Mission to India last November,  General Electric CEO Jeff Immelt and Boeing CEO Jim McNerney flanked Barack Obama in his first public appearances in Mumbai.  Immelt’s  GE Energy unit had just won its largest order  in India to supply  six gas turbines, three steam turbines and generators for a 2,400 megawatt power plants being built by billionaire Anil Ambani’s Reliance Energy in the small town of Samalkota, Andhra Pradesh.

Last month, President Obama was at General Electric’s plant where these turbines are being built. Here is what he had to say

That’s why I traveled to India a few months ago — and Jeff was there with us — where our businesses were able to reach agreement to export $10 billion in goods and services to India.  And that’s going to lead to another 50,000 jobs here in the United States.  (Applause.)  Part of the reason I wanted to come to this plant is because this plant is what that trip was all about.  As part of the deal we struck in India, GE is going sell advanced turbines — the ones you guys make — to generate power at a plant in Samalkot, India — Samalkot, India.  Most of you hadn’t heard of Samalkot — (laughter) — but now you need to know about it, because you’re going to be selling to Samalkot, India.  And that new business halfway around the world is going to help support more than 1,200 manufacturing jobs and more than 400 engineering jobs right here in this community — because of that sale.  (Applause.)

So it’s a perfect example of why promoting exports is so important.  That’s why I’ve set a goal of doubling American exports within five years.  And we’re on track to do it.  We’re already up 18 percent and we’re just going to keep on going, because we’re going to sell more and more stuff all around the world.  (Applause.)   When a company sells products overseas, it leads to hiring on our shores.  The deal in Samalkot means jobs in Schenectady.  That’s how we accelerate growth.

I have maintained that exports from America are crucial to the recovery. Exports to India can go up by 500 percent or more in five years, if governments are supportive. This is good for poor farmers in near Samalkot whose children can’t get light to study at night. It is good for engineers in New York.  Let’s make it happen, friends.

February 5, 2011   No Comments

Areva gains lead in civil nuclear race in India

France’s Areva has signed an EUR 7 billion framework agreement with Nuclear Power Corporation of India Ltd (NPCIL) for the construction of two EPR reactors at Jaitapur in Maharashtra state, to be commissioned in 2017-18, along with uranium fuel of 25 years.  Alstom will supply the turbine- generators separately.  Site work will begin next year with a view to begin construction from 2013.   Jaitapur is to be a 9600 MWe energy park with six EPR units.  Areva promises “maximum localization” of component production, and points to its 2009 agreement with Bharat Forge of Pune to set up by 2012 a new casting and forging facility in India for heavy nuclear components, to supply both domestic and export markets.

“In the field of nuclear energy, negotiations have reached an advance stage to pave the way for launching of nuclear power reactors in Jaitapur in partnership with Indian industry,” India’s Prime Minister Manmohan Singh said at a joint news conference in New Delhi with French President Nicolas Sarkozy, while on a four-day India working trip, accompanied by several chiefs of French companies. NPCIL had earlier signed an initial agreement with Areva for the supply of six nuclear reactors in February 2009. On Nov. 29, NPCIL received environmental clearance for the Jaitapur plant, clearing another vital hurdle for the project.

The agreements were signed by Areva’s Chief Executive Anne Lauvergeon and NPCIL’s Chairman and Managing Director S. K. Jain. The pacts with Areva are likely to speed up the French company’s entry into the sizable Indian civilian nuclear power sector, ahead of its American rivals.

The process of setting up the reactors slowed after the U.S.-based companies raised concerns over a law passed by India in August that made them liable for damages in the event of a nuclear accident. Subsequently similar concerns have been expressed from France, the UK, Canada and elsewhere. The India Experts expects India take up these concerns in side agreements and regulations that convert its new liability law into actionable rules of engagement. Stay tuned.

December 13, 2010   No Comments

India may sign Nuclear Convention on Supplementary Compensation

Prior to President Obama’s visit to New Delhi, India plans to sign a critical international agreement that defines the terms of liability and compensation in the event of an atomic accident, says the Indian Express newspaper. The CSC or Convention on the Supplementary Compensation for Nuclear Damage, has been the  subject of intense negotiations in the last few weeks between Delhi, Washington, Vienna (where the the International Atomic Energy Agency is based) .

In a September 2008 letter of intent, India told the U.S. it would sign the CSC. The Hindu reports that American nuclear suppliers had insisted on this because they said the existing Indian and international law would leave them exposed to potentially unlimited claims for damages by Indian victims in the event of a nuclear accident involving U.S.-supplied reactors.  The CSC  includes  draft national law that signatories are supposed to model their domestic legislation on. India  says its new liability law conforms to the CSC  but American officials say the Indian provisions on the nuclear operator’s right of recourse against a supplier (Section 17(b) and Section 46) in the event of an accident don’t conform to CSC recommendations.n

October 24, 2010   No Comments