For German multinational technology conglomerate Siemens, India’s relative stability and steady growth signals the next big opportunity amid growing geopolitical tensions in the rest of the world.
India is its fourth largest market by revenue and has a local workforce of over 38,000 employees (6,200 in listed Siemens Ltd) and 25 factories. The company also has about 10,000 software and AI experts across its global innovation centres in Bengaluru and Pune.
With the government’s push for semiconductor manufacturing, data centres and sovereign artificial intelligence (AI), Siemens wants to reposition itself as an AI and software company, going beyond its traditional segments of power, commodities and infrastructure.
In an interview on the sidelines of Siemens India Innovation Day, Dr Peter Koerte, a member of the managing board, chief technology officer and chief strategy officer, Siemens AG, and Sunil Mathur, managing director and chief executive officer , Siemens Ltd, discuss the company’s India growth roadmap, impact of the West Asia, evolving global hiring strategy, AI spurring private investments and more. Edited excerpts:
Siemens has had a strong India presence with a large workforce, factories and R&D centres. Where does the market stand in terms of AI innovations and product building for Siemens? Where do you see India driving value in AI?
Sunil Mathur: The underlying advantage that we have is we've been present in 25-30 market segments over the last so many years. Now we have the advantage of AI, a common layer across everything that we do.
With India's opportunities growing, it only adds to our offerings making it much more competitive and much more relevant as India continues on its growth story. We started with government and public sector capex, there's a lot of AI required there. Now private sector capex is beginning to pick up and there'll be a huge demand for AI there as well.
AI is going to be one of the backbones that will run across all the businesses that we have and will drive more value to the customers from what we have so far.
Peter Koerte: India will be leading in applications for AI. This is very natural as India is the world's capital for software development. Almost every software development team today nowadays is using AI to write better code, to test faster, to do more business in a way. Certainly that’s where India is ahead of everybody else.
India is one of the top four markets in terms of revenue contribution for Siemens globally. Do you see it entering the top three anytime soon?
Mathur: I would like it to. We're working hard to make it to the top three. A lot of it depends on how things here in India pan out in the future. But we have those ambitions.
India has made significant announcements around data centre tax holiday extensions, semiconductor manufacturing and GCCs. Will Siemens benefit from these policy tailwinds and how do you plan to participate in these areas?
Mathur: All the initiatives that the government has launched — PLI scheme for manufacturing, right, National hydrogen mission, the IndiaAI mission, etc — all of these are areas will enable our customers to grow further and grow faster.
And that's what creates a demand for us because we are able to support them with our offerings on their growth journeys. So absolutely, all the initiatives of the government, whether it is in manufacturing, IT space, data centres, all of that contributes to creating that environment for capex growing in the country. We will be part of that growth story.
Siemens has raised its overall growth outlook for FY26 and across segments such as digital industry and smart infrastructure. Are you expecting supply-chain disruptions, given the ongoing geopolitical disruption in West Asia?
Koerte: It is too early to say. What we for sure see is that there is a high demand still coming. We have data centres that are fuelling demand and our expectation of business. As that growth continues to shine, software is growing all along. That’s usually not disrupted by these supply chain issues. We have to see how that grows.
Usually, these investments are made for a longer period of time, meaning that you just don’t stop it today. These are the sign of orders. Though there could be a bit of a lag between when the events happen. I cannot tell you today.
Is AI impacting the way you are hiring? How has hiring evolved for you in the last couple of years? How are you looking at restructuring?
Koerte: Restructure is a hard word. It's a shift in competencies and mixes for sure. We need more data scientists because data is the key thing in there. These are job families that we're looking very much on. In AI, there are also people trained in just traditional machine learning algorithms and we're looking for them.
UX designers are becoming important. Because the question is not only what's AI but where do you use the AI and how do you consume it?
It becomes important to work on how you consume AI. Probably on your smartphone or in your web application. But in industry it's more complex.
Think about using AI on the shop floor and now how do you interact with it. I cannot always get to my phone or computer. These are the things that we're exploring right now and that's where we need people that are coming mostly from different industries also in order to inspire us.
What skills are you seeing getting disrupted within Siemens because of AI?
Koerte: The traditional software development, software engineering is certainly seeing a significant shift. Copilots and all the AI tools are terrific tools to use, which means now you need to rethink of how software development teams are structured.
Architecturally speaking, smaller teams with higher calibre in terms of knowledge, that's the trend that we're seeing.
For India, it means two things. One, the teams will become smaller but two, they will become more part of the value creation of a new product. It's an opportunity.
Any expansion and hiring plans in India?
Mathur: We are looking very clearly in all our segments. We are in digital industry, smart infrastructure business, and the mobility business.
We already opened a factory recently for bogie manufacturing. We are expanding over there. We've just expanded a factory in Goa for medium voltage equipment there.
We continuously are expanding with new products, new offerings, expansion in existing capacities as well. We are expanding our capacities here in Mumbai as well. So it's a continuous process. We do it on a business case basis.
What’s the overall demand outlook in India? What are going to be business focus areas over the next one-two years?
Mathur: It's been very much public sector capex led — capex in infrastructure, government capex up till now. That will continue when you look at the number of ports and airports that are coming up. The energy transition and the requirement to go from 250 gigawatts of renewables to 500 gigawatts, all of that requires capex.
That will be a very major demand that will happen right down through into the distribution systems and the smart grids and all of that.
Private sector capex is picking up as well. There's the complex manufacturing, semiconductor manufacturers, batteries, solar, etc. All of that is happening. That will continue to grow.
But then we are also beginning to see steel, cement, automotive, pharmaceuticals, all of these businesses beginning to pick up as well. Over a period of time, we will revive the curve and it will start to grow.
Over the next one or two years, we are hoping that private sector capex also picks up as well as public capex has been doing so far and that's a huge opportunity.
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