Economic Times: July, 2015
New Delhi: Fortune 500 industrial conglomerate 3M is looking to scale up investments in India with an eye on making it the company's first designated export hub globally.
India's move towards the goods and services tax regime and improvements in the corporate tax system make it an attractive destination for setting up an export base, HC Shin, executive vice president in charge of 3M's international operations, told ET. This would mark a departure from the company's traditional approach of producing locally across regions.
"3M can certainly bring in a lot more investment, as investment conditions continue to improve such as GST, corporate tax...We can also consider India as an export base in addition to our domestic presence. If you look at the cooperation coming through the ASEAN and other free trade initiatives of India, a lot of good things can happen," Shin said.
"We believe in regional selfsufficiency rather than using a single country as a hub. For us, exports are an exception rather than the norm. So if you ask me which is the designated strategic export country, there's none," Shin told ET at the end of a three-day visit to India during which he sensed a stark difference in the body language of people and the confidence in its economy compared to his previous visit in 2013.
Shin stressed that the reality he has seen 'coincides' with what he had read about India's recent resurgence on the global economic arena before his visit.
"We have been making in India for 28 years, with an India for India strategy. We learned it early and the hard way that bringing boxes from overseas and handing them to customers doesn't work," Shin said, adding that its domestic revenue is growing at over 20% in several segments, indicating 'strong performance in the current environment.'
3M has invested $100 million over the past 15 years into its 1,600 employee-India business, which includes setting up a fullblown research and development lab whose innovations have 'astonished' 3M's US researchers, according to Shin.
With the government's Make in India drive attracting new foreign players, 3M is also looking at helping its global industrial customers set up shop in India. "Because we have localised most of 3M's solutions, we can help them localise their product swiftly," said Shin.
Apart from manufacturing, 3M is keen to lend its expertise on Digital India and smart cities initiatives. It is betting big on ecommerce to improve its reach to medium and small enterprises and improve productivity of consumers by putting technical guides to some products online.
"We want to outgrow the market... If GDP is growing at 5 per cent, we can grow two to four times that and we are getting such accelerated growth from India now," Shin said, stressing that GST would be the biggest gamechanger for players like 3M.