Florida-based Carrier, a global heating, ventilation and air conditioning giant, is looking to ramp up investments in India, chairman and chief executive David Gitlin tells ET's Mohit Bhalla in an interview. Edited excerpts:

What do you make about the general business environment in India?

We've been very positive about the business environment for decades. We established a presence here in 1987. I feel like we are at an inflection point in India. We've been bullish on India for very many years. We've established a very strong presence, especially on the commercial heating, ventilation and air conditioning (HVAC) side, but we feel India will go through a phase of exponential growth and we're determined to be right in the middle of that. We have a strong manufacturing presence here. We are going to significantly increase it. We have a strong supply chain, we are going to increase that 4X over the next five years. We have a strong engineering and digital presence, and we are going to significantly expand that. When we look globally, we are probably as, if not more, bullish on India than any country in the world right now in terms of where to invest.

What type of investment are you looking at to meet your expansion targets here?

We've invested over $1 billion in India over the last decade and we are going to increase that by $800 million over the next 5 years. A lot of it is going to start with manufacturing. In our Gurugram facility, today we do high-end commercial air-conditioning systems and chillers. We are going to be adding content at the high end to produce tropical compressors that can localise our ability to address some of the bigger establishments in the country. It starts with significant further localisation on the manufacturing side and our experience is that once you do that it feeds on itself. Starts with manufacturing, then you are going to grow the supply chain, then you win more content, you win more service agreements and then more digital work follows. Then you add more service folks and more technicians.

So, once we start to build more manufacturing in the country, not only for India but for export as well, that is going to feed on itself with significantly more job growth.

What are your global customers saying? Do you see them setting up more physical infrastructure in India?

Absolutely 100%. Even the success of the G20 Summit is a testament to that. India has established itself on the world stage in such a profound way. It's in a unique phase that a lot of our peers in the US are trying to get in a very significant way.

I wanted to talk about some of your products. Theres a big push in logistics here. A lot of physical infrastructure could get created. How are you gearing up your products ?

What’s nice about our offering is that once countries urbanise more, we are part of that solution. So whether it’s our chillers or air conditioning systems for warehouses, it goes much beyond that. It gets into data centers, it gets into chip manufacturing, it gets into urbanization. India is going through massive urbanization over the next decade - one Chicago being built every year for the next decade. That is right in our wheelhouse.

An important phenomenon is that India’s GDP per capita will double over the next seven years or so between now and 2030. The demand for air conditioning for both commercial and residential applications is going to increase exponentially. So today only 8% of homes have air conditioning in places like the US it’s 90%. What happens then is that building contribute 40% of carbon emissions and 40% of that is from air conditioning systems. So, we have to facilitate that demand but we have to do it in a way that is friendly to the environment. So, we have innovative solutions to facilitate that transition.

Is AI playing a role in your industry?

Significantly. We were in the middle of AI before it became such a household terminology. For example the business we do in Bangalore under EcoEnergy. We will install a digital platform for a customer who has multiple sites and we will use the data that comes out of those buildings to create more energy-efficient solutions for those customers. We actually provide guarantees around looking at trends and looking at controls over their HVAC systems to make sure that we use optimization of when they use the equipment, how hard they run their equipment at different times of the day, to make sure we can get them energy efficient savings and sustainability savings.

General feel on the economic outlook? Are you optimistic, cautious, where are you veering?

I think we try to be pragmatic. I think the growth will not be what it was in recent years. But we are clear-eyed about that -- we also try to be in industries that can grow significantly despite GDP’s growing at low single-digit levels. For example the Viessmann acquisition that we did in Europe (Carrier has announced a deal to buy Germany’s Viessmann for $13.7 billion). Europe is growing through relatively low growth. It has been more resilient than we thought going into 2023 but there’s no question that the growth rates will come down. In a place like the US and Europe there will be lower growth this year and next year than perhaps in prior years. But what’s also happening is a massive transition from fossil fuel to electrification. Households will migrate from using fossil fuel for heating to using electric-powered heat pumps. That will drive our industry in Europe. And that’s one of the reasons we did the acquisition there. We are fairly clear-eyed and pragmatic about growth rates by country and globally we do think there’s going to be some pressure in certain countries as we go into 2024 but we also think we can grow significantly. Our financial algorithm is to grow at 8% a year and we feel confident that on a steady-state basis that’s the kind of growth rates we will see as a business.