Cummins to invest $1 billion across its manufacturing sites in India

As the global manufacturer of engines and power generation products prepares for the switch from conventional fossil fuel engines to those powered by hydrogen and other green energy options, the Cummins Group plans to invest approximately $1 billion in its India operations and hire 4,000 people over the next ten years. According to Ashwath Ram, managing director of Cummins Group India, "We have invested a billion dollars in India over the last 15 years." In order to make the switch from the present technologies to new ones, we intend to invest a similar sum over the following ten years.

Tata Cummins handles the majority of Cummins' automotive business in India, and some investments are also made through subsidiary firms. Cummins and Tata Motors struck a legally binding agreement in April of this year to jointly produce a variety of low- to zero-emissions technology products in India during the ensuing few years. The new corporate entity, TCPL Green Energy Solutions (GES), was created by the two companies and will start operating in FY25.

As it collaborates with numerous automakers to help the latter transition to green mobility, listed company Cummins India (CIL) is planning to double its investment in the upcoming years to between '350 and '400 crore annually. When compared to the previous two to three years, our investment is expected to increase dramatically and double in the upcoming years. Our capex cycle will expand as more technologically advanced items are developed, according to Ram.

Cummins made infrastructure-building investments throughout the last ten years. To support entry into new markets and segments as well as the electrification of the business, this has evolved to investing in growth-based goods. CIL will use internal accruals to achieve the funding requirement. Cummins Group, a participant in the government's productivity-linked incentive (PLI) programme, intends to invest Rs1,000 crore in India during a five-year span beginning in FY 2022–23. According to Ram, this includes technology investment but excludes capital expenditures for building infrastructure.

Engine producer Cummins will invest $1 billion in India. The benefits of tougher pollution regulations have gone to Cummins. The improvements have enabled the business to climb the value chain and turn into a producer of complex parts with a high electrical content.

Ram, who used the example of the transition from Central Pollution Control Board (CPCB) II to CPCB IV + genset requirements, India is no longer behind the rest of the world in terms of emission standards. As on July 1, the new standards will increase the cost and improve the fuel efficiency of gensets. "Price increases of 30–50% may be necessary in the sub–800kW genset range due to the shift in emission requirements. According to Priyankar Biswas, analyst at Nomura Research, the significant price gap will probably increase pre-buying and help 1QFY24F sales and EBITDA.