India to be deep tech powerhouse and big part of Siemens' game plan

Siemens AG aims to more than double the share of software and digital services in sales to 20%, and India will play a key role in this strategy, chief executive officer Roland Busch told ET in an interview. The German conglomerate has become the world's largest industrial software company, pivoting from legacy industrials and manufacturing.

"India was traditionally known for offshoring software and engineering products... the company is now looking at more of deep technology and development of core products," Busch said. "We believe that the DNA of Siemens is technology, and this is where the value of Siemens sits."

This part of the business is relatively small but growing rapidly, the CEO said. "We are currently sitting on 6.5 billion euros of software and digital business revenues out of a total 75 billion euros for the group. So there's still a way to go, but this part grows faster," said Busch.


Siemens has invested 12-13 billion euros to build up its software portfolio over more than a decade, and will continue to expand it.

The company also has a global collaboration with Microsoft for generative artificial intelligence (Gen AI) and is working on developing a version of Copilot that allows the use of spoken English on the shopfloor to programme robots, Busch said. Microsoft Copilot is a Gen AI chatbot developed by Microsoft.

"This is the power of large language models (LLMs), because they make AI technology accessible with your natural language, which makes it much easier to use," he said.

Busch is confident that even in markets such as India, South Africa, West Asia and Southeast Asia that are home to vast numbers of electrical and mechanical engineers, Gen AI will not be a disruptive force in the labour markets.

"Artificial intelligence will be used predominantly to develop prototypes using its existing products, while engineers can then work on fine-tuning products," he said.


India will be a key region for the conglomerate to fortify its human resources capital and the company is looking at adding another 3,000 specialists. It already has a team of over 34,000 in the country, including 2,000 specialists.

"We continue hiring here because the value proposition is great, we have top talent, young talent that is willing to learn and develop in the future," Busch said. He believes India is the "go-to" place for talent in digital technologies.

Siemens has 30 manufacturing sites in the country. It sees India as not just as a local manufacturing centre, but also an export hub, and is planning to ramp up local capacities for mobility. The India factories mainly manufacture equipment such as steam turbines, motors, switchgear, generators, transformers, relays, smart grid systems. The company operates in four key verticals in India -- power, energy and gas (34%), smart infrastructure (33%), digital industries (22%) and mobility (7%).


"I can clearly imagine that this is a tipping point as we speak, to go for not only more local value, but also globally," said Busch, although he said that winning orders in the domestic market would remain a priority.

Siemens is looking to make investments across the four market segments as it looks to improve market share.

For FY25, it aims to invest ₹1,000 crore in India in various projects such as capacity expansion of the power transformer factory at Kalwa, near Thane in Maharashtra, and setting up the vacuum interrupter factory in Goa, which the company had announced in November 2023.



(You can now subscribe to our Economic Times WhatsApp channel)