Wipro GE HealthCare to invest $1 bln to boost manufacturing in India

Peter J Arduini, president and CEO of GE HealthCare Technologies, says the country is a "high potential, high priority market"

By Naini Thaker , Harichandan Arakali

Published: Mar 26, 2024 02:17:29 PM IST

Updated: Mar 26, 2024 02:28:28 PM IST

On the left, Peter J Arduini, president and CEO of GE HealthCare Technologies with Azim Premji, chairman of Wipro Enterprises and chairman of Wipro GE HealthCare, during Tuesday morning’s event; Image: Selvaprakash Lakshmanan for Forbes India

Wipro GE HealthCare, the medical devices and technology joint venture between GE Precision HealthCare and India’s Wipro Enterprises, has announced that it will make “an investment of over Rs 8,000 crore [about $1 billion] in manufacturing output and local R&D over the next five years”.

“India is a high potential, high priority market for GE HealthCare globally,” Peter J Arduini, president and CEO of GE HealthCare Technologies said during an event in Bengaluru. “We will continue to invest in expanding India’s domestic capabilities and its global footprint in med-tech manufacturing and R&D.”

This is the first time Arduini is visiting India since GE HealthCare became an independent company listed on the Nasdaq stock exchange in January 2023, after being spun off from General Electric Company. The erstwhile GE had its largest integrated, multidisciplinary R&D base outside the US in Bengaluru, called the John F Welch Technology Centre, which will celebrate its 25th anniversary next year.

With the iconic American conglomerate being restructured into three independent companies, health care being one, these companies will continue with their own R&D teams at the technology centre. The health care R&D team is now called HealthCare Technology Centre India (HTCI), comprising about 1,800 engineers, scientists and various domain specialists.

Also listen: Jyoti Gera at GE HealthCare on how healthcare could be the next 'digital-first' success story in India

The India R&D team is envisioned to play a growing role in GE HealthCare’s artificial intelligence (AI) push, as Arduini positions the company not as a medical devices’ vendor, but a broader medical technologies business, focussed on personalised and precision care.

Following the dismantling of the 131-year-old company, GE will continue to operate as GE Aerospace, and the energy and turbines business, which will be called GE Vernova, is expected to list on the New York Stock Exchange on April 2, according to a February 29 press release from GE.

GE HealthCare Technologies is a $19.6 billion company by revenue, with about 51,000 employees worldwide. Arduini is among several chief executives of large multinational companies, including Tim Cook, CEO of Apple, Bernard Charlès, chairman of France’s Dassault Systèmes, a 3D simulation software leader, and Jensen Huang, president of NVIDIA, who’ve visited India over the last two years, announcing plans to step up investments in India. The investments range from software development and R&D to more local manufacturing as well in recent years.

In addition to being the world’s fastest-growing major economy, India is also seen in the West as an alternative to China in the long term, for establishing a strong global supply-chain base. India’s enticements to such companies, in the form of tens of billions of dollars in government funding via local production-linked incentives (PLI) and pari passu support for setting up semiconductor fabs has made it an increasingly viable alternative.

An important milestone in GE’s health care business in India was the setting up of the Wipro GE HealthCare joint venture in 1990; it has become one of India’s biggest medical tech distribution (from MRI machines to baby warmers), design and R&D and manufacturing companies today.

Also watch: GE HealthCare's Chaitanya Sarawate on how care in India can leapfrog to deliver value to the masses

India will see an “exponential expansion of manufacturing footprint”, said Azim Premji, chairman of Wipro Enterprises and chairman of Wipro GE HealthCare, during Tuesday morning’s event. The company’s new investments were “strategic” and will further boost the localisation of its products, he added.

India’s medical devices market was estimated at about $3 billion in 2009 and $11 billion in 2020. The Government of India released a national medical devices policy in April 2023, targeting growth that would take the sector to as much as $50 billion by over the next five years.

In 2009, GE merged its local health care business unit with the joint venture, in which the American company holds 51 percent and Wipro, best known for its eponymous IT services company, the rest. Today the joint venture has four export-oriented manufacturing plants in Bengaluru. The latest was established in March 2022 with an investment of a little over Rs 100 crore, under the Indian government’s PLI scheme.

GE Wipro HealthCare’s revenues for the fiscal year ended March 2023 were at Rs 7,135 crore, with profit after taxes of Rs 450 crore, according to data sourced from markets intelligence provider Tofler. About 25 percent of the company’s output is locally consumed and the rest is exported, said Chaitanya Sarawate, managing director of Wipro GE HealthCare and president and CEO of GE HealthCare South Asia to Deccan Herald in a recent interview. India is probably the company’s fourth biggest market, after the US, China and Japan, he’d said. India is also among “our top three fastest-growing markets”, he had told Forbes India in January.

As a part of the fresh investments, Wipro GE HealthCare’s PET CT Discovery IQ will be exported to 15 countries. And its Revolution Aspire CT, Revolution ACT and MR breast coils will be manufactured locally for exports.