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Luring India businesses considered a bonus

ST. PAUL - Minnesota may use one of the world's emerging and fastest-growing economies to help its own.

India fits that description and Gov. Tim Pawlenty said that helping India open Minnesota facilities would be an added benefit to a trade mission he is leading there.

Talking to Minnesota reporters via a conference call from Bangalore, India, Pawlenty said the trade mission's main job is to find buyers for Minnesota products, but he is open to helping Indian companies gain a foothold in Minnesota, too.

"The investment back in Minnesota is kind of a bonus," he said.

Two Indian companies are making significant investments in rural Minnesota, and Pawlenty plans to visit the firms' headquarters the next two days.

Today, the governor stops in Surat, India, to tour the Essar Group's steel plant. Essar just bought U.S. Steel, which plans a $1.6 billion steel mill on the Minnesota Iron Range.

It is the biggest project in the Iron Range's history. Other Range operations mine taconite and ship it to mills elsewhere to turn into steel.

The U.S. Steel plan is only one of many proposals for Iron Range economic development, but Pawlenty said it is one that "that actually has a chance to come to fruition."

On Friday, Pawlenty heads to Mumbai, India, where he talks to a representative of Suzlon Wind Energy, which owns a wind blade manufacturing plant in Pipestone, Minn.

Pawlenty said he did not think a foreign trade mission takes away from encouraging Minnesota-based businesses. While Pawlenty said "where the money comes from is interesting," he said more important is that money is flowing into Minnesota.

Foreign companies with established sales networks give their Minnesota plants a head start over start-up Minnesota companies, Pawlenty said.

Also, if a foreign company opens a Minnesota operation, "that doesn't prohibit others from doing it," he added.

One of the Minnesota Legislature's biggest wind-power proponents said he likes the idea of Pawlenty visiting India.

"There is validity to the governor's recruitment of overseas wind turbine manufactures," Rep. Aaron Peterson, DFL-Appleton, said.

Iowa has recruited three overseas firms in the wind-power area, Peterson said. He urged Pawlenty to go a step beyond his trade mission and do like Iowa Gov. Chet Culver and visit European wind-power generator manufacturers.

Peterson had wanted Minnesota-based companies to make all wind generator components. He changed because of "a realization that the technology is still overseas. But it is coming to America and hopefully Gov. Pawlenty's efforts will catch up to the Iowa governor's."

Peterson said he wants to see the electric generator, gears and other complex machinery made in Minnesota. And he said the Range's U.S. Steel plant could lead to the manufacture of wind-generator towers in the state.

The state representative encouraged Pawlenty to spend more time in Europe.

"The European sector probably is a little more stable than the emerging economies," Peterson said.

However, manufacturing plants cannot be located just anywhere, Peterson said, pointing out problems the Pipestone Suzlon plant has in locating local workers.

Some of the major manufacturing work would have to come to St. Paul, places like the soon-to-close Ford Ranger plant, Peterson added.

"The trip to India is encouraging and I hope he keeps at it," Peterson said.

Pawlenty is in the middle of a week-long trade mission, leading 73 Minnesota business leaders, government officials and reporters. Stops include New Delhi, Bangalore and Mumbai (formerly Bombay).

The delegation returns to Minnesota this weekend.

Selling to India is the trip's main mission. India's economy has grown an average of 7 percent a year for the past decade, even more in the past couple of years.

"The population of the United States is 300 million, while it is 1.3 billion in India and approximately a like number in china," Pawlenty said. "If you don't sell into those markets, you miss a real opportunity."

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.