Playing Catch Up

Why Atlanta and Georgia still have a long way to go when developing ties to India.

Bobby L. Hickman

December 1, 2007

This summer's announcement that Wipro Technologies is locating a new software development center in Atlanta is the latest indicator of growing economic and cultural ties between India and Georgia.

Trade to India has increased significantly during the past year, and is expected to continue growing, says Ken Stewart, commissioner of the Georgia Department of Economic Development. In 2006, Georgia exported almost $195 million worth of goods to India, a 21-percent increase from the previous year. Georgia is the largest U.S. exporter of textile products to India and third in exports of paper to India. Other major exports to India from Georgia include computers, electronics, chemicals and non-electric machinery.

Last year, the Savannah Customs District reported imports of goods from India totaling more than $444 million, also a 21-percent increase over 2005. The top imports from India include woven apparel; iron and steel products; textiles; machinery; and pharmaceutical products. Indian capital investment in Georgia totaled $25.8 million as of 2006.

With approximately 80,000 people from India living in Georgia and more than 2,000 students from India enrolled in state institutions, Stewart says the state has a decent and growing relationship with India. "As their middle class continues to expand and their prosperity continues, we'll continue to see this trade relationship grow."

Lagging behind

Dr. L. Narsi Narasimhan, president-elect of the Georgia Indo-American Chamber of Commerce (GIACC), believes Atlanta and Georgia are strategically positioned to trade with India because of logistics, transportation and its Sunbelt location.

And while Georgia has all the good ingredients to be a trade leader with India, the state is lagging behind the rest of the country in terms of reaching its trading potential with India, says Narasimhan, CEO of software/services firm Palaam. "We believe that situation is changing. Hopefully Georgia can catch up and do better than the national average in the near future."

Narasimhan says a number of large Indian companies in a variety of industries already have a presence in Georgia. Aside from Wipro, biotechnology firm Reddy Labs has operations here, and Mahindra & Mahindra manufactures tractors in Calhoun. "It's a two-way street: Indian companies are investing in Georgia, and Georgia companies are doing business in India," he says.

Mahindra & Mahindra, the world's fourth-largest tractor manufacturer, is among those forging closer ties to Georgia. The company also makes automobiles, trucks and SUVs, and Global Vehicles in Alpharetta recently obtained the North American license to sell all of Mahindra & Mahindra's vehicles.

Stewart says state officials called on Mahindra & Mahindra officials in Mumbai during their February 2007 Asian trade mission, adding, "We hope if they do expand into the U.S. at some point, they may consider Georgia for a manufacturing facility for other vehicles."

Good things are happening

Historically, Indian companies have settled in such areas as New York, New Jersey, Chicago and San Francisco. Those city names "are well-recognized in India, whereas Atlanta was not as well known," Narasimhan says. But name recognition began building in the 1990s for Georgia, and the Atlanta Olympics played a major role.

Georgia and Atlanta also have increased their efforts to build relationships with India. Georgia universities and colleges have not historically done a good job of establishing links with India. "Georgia Tech was a late comer to the game, but they are now establishing more programs," Narasimhan says. Also, for many years other states' governors have visited India in the past while Georgia's did not. In February 2007, Gov. Sonny Perdue visited India along with other government and business leaders.

Narasimhan, who believes the right things are happening now, says opening a Georgia trade office in India would help. "A one-person office in India may not sound like a big thing, but from a symbolic standpoint, it sends a strong signal the governor and commissioner are serious about expanding trade. It would have a major impact."

State officials still are considering whether to open a permanent trade office in India. During the February mission, officials went to Mumbai, Delhi and Bangalore, where they met with government and corporate leaders.

That trip included an initial exploration of putting an office in India.
India's economy grew at 10 percent last year and is expected to continue growing for the foreseeable future. "We expect them to continue to make investments offshore; we expect to expand our university and student relationships with India; and we expect our trade to continue to increase," Stewart says. "It makes sense for us to look seriously at locating a physical presence there. We're still studying it; we just haven't decided yet."

The February trip included a "cold-call" meeting with Wipro officials. That visit was one of several contacts that contributed to Wipro's August announcement that it will open a software development center in Atlanta. Wipro plans to initially hire a couple hundred people, and then ramp up to maybe 500 and even 1,000 in fairly short order, Stewart says.

Georgia on their minds

Whenever Georgia lands a large foreign project, state officials often field questions from the national press asking why companies decide to locate here. "One of the things that particularly interests foreign companies is talented people," Stewart says. "We've had a larger in-migration of younger, highly educated people into Atlanta than any other city in the country. That fact is not unnoticed by people around the world. Atlanta and Georgia have a robust, growing economy; a low cost of doing business; a talented work force focused on technology and innovation; and good business policies in place. It's just a good place to do business."

The port of Savannah also is a major factor for luring foreign investment. There are currently 22 all-water routes to Savannah from Asia (17 via the Panama Canal and five through the Suez Canal). "Those routes are going to grow substantially," Stewart says. "There are still a lot of goods that are coming across the country from ports in California. It doesn't make sense to ship something to California, put it on a truck or train, and then send it cross-country. As we get more all-water routes, we're going to have less of that [cross-country shipping]. Our port system is strong and growing more rapidly than any other ports in the country."

Atlanta's airport and Delta Air Lines also are huge assets, as both provide international connectivity. Delta has added around 180 international destinations in the past 18 months. "The internationalization and globalization of Georgia has been increasing substantially," Stewart says. "We have more than 60 consulates and bi-national chambers, including an honorary consulate from India who's been here since 2000. The Georgia Indo-American Chamber of Commerce also has been very active."

Says Stewart, "Georgia's very much on the radar screen in India. We expect to see more projects from India. Wipro is just the beginning."

Global Exchanges

Georgia firms with operations in India:

• Coca-Cola Company
• Delta Air Lines
• Ebix Inc.
• Habasit Belting
• Internet Security Systems
• JBoss Inc.
• Kurt Salmon Associates
• Manhattan Associates
• Recall Corporation
• S1 Corporation

Indian firms with operations in Georgia:

• Allsec Technologies Ltd.
• Hexaware Technologies Inc.
• Infosys Technologies Ltd.
• Larsen & Toubro Infotech Limited
• Mahindra USA
• NIIT (USA)
• Patni Computer Systems Ltd.
• Prabhat Industries
• Reddy US Theraputics
• Satyam Computer Services
• Sonata
• Tata Consultancy Services