Carrier, the global leader in air conditioning and refrigeration solutions, is set to make a significant investment in India. David Gitlin, Chairman & CEO of Carrier, in an interview to CNBC-TV18 stated that they plan to invest another $800 million in India over the next five years.
Carrier which has been present in India since 1986, operates a manufacturing facility in Haryana. In the past ten years, the company has committed investments exceeding one billion dollars within the nation.
One of the key drivers behind this investment is the enormous opportunity presented by India's low air-conditioning penetration. Gitlin stated, "Only about 8% of the residential homes in India today have air-conditioning compared to more than 90% in countries like the United States and Japan. So we see growth of air-conditioning both for residential and commercial growing exponentially."
However, Gitlin is also acutely aware of the environmental impact of HVAC systems. He emphasised, "As we grow air-conditioning exponentially, we have to make sure that we do that in a way that is friendly to the environment because 40% of carbon emissions come from buildings and 40 percent of that from HVAC systems."
In 2022, Carrier recorded sales totaling $20.4 billion, reflecting a 1% decrease compared to the previous year, along with free cash flows amounting to $1.4 billion. Looking ahead to 2023, the company has set its sights on achieving sales of $22 billion.
Carrier has high hopes for India's role in their global operations, with Gitlin stating, "We are looking at double-digit growth in India. India as a percentage of sales for Carrier is going to grow exponentially." This optimistic outlook is fuelled by the potential for India to not only be a significant market but also a source of exceptional talent in various fields.
Gitlin continued, "We have 4,500 employees in the country, and India is one of the most strategic growth vectors for us globally. So we are extremely bullish on India not only as a market but also as a source for phenomenal talent - whether it is manufacturing, digital talent, or engineering talent. So we are coming in extremely aggressively into India."
Carrier's expansion plans in India also include strengthening its manufacturing presence and building a comprehensive ecosystem. "We are going to significantly expand our manufacturing presence in India and thereby build an ecosystem. We will also quadruple our supply chain spend in the country over the next five years. So we see our employment increasing by a couple of thousand over the coming years," Gitlin explained.
In a bid to stimulate the domestic air conditioner manufacturing sector, the Indian government has implemented a Production Linked Incentive (PLI) program, providing incentives amounting to a substantial Rs 6,238 crore.
Gitlin also expressed appreciation for the Indian government's efforts to incentivise manufacturing and develop a resilient supply chain. "Any incentive from the government to push towards renewable energy is always welcome," he added.