Italy’s presence in India counts over 600 Italian companies operating in the country, accounting for slightly less than $3 billion investment cumulatively between April 2000 and June 2018.
After just returning from a high-profile summit meeting with Japanese Prime Minister Shinzo Abe in Tokyo, Prime Minister Narendra Modi had another important bilateral meeting on Tuesday — with Italian Prime Minister Giuseppe Conte. Conte was in Delhi only for a day and also attended the Technology Summit.
The Italian PM chose India as one of his first visits outside the EU, demonstrating the prominent place given to India in the Italian foreign policy spectrum. Italy acknowledges both geopolitical and economic importance of India, and is indeed actively trying to step up its relations to a new high, based on good diplomatic relations and economic exchanges. India has recently been identified by Italy as one of the top five priority countries for internationalisation of business. In his visit, Conte was accompanied by a high-level delegation mainly composed of business people.
Conte’s visit sanctioned the newly found enthusiasm for stepping up bilateral relations with India. This visit came exactly one year from the last official visit, when Italy’s former PM, Gentiloni, visited New Delhi on 30 October 2017, for the first time in 10 years. In the year of the 70th anniversary of diplomatic relations between the two countries, this fortunate coincidence was auspicious and reinforced the symbolic value of continuity.
Conte met with Modi for the bilateral talks. The two leaders discussed common concerns to global governance. Italy and India will most likely hold the G20 presidency for consecutive years (notably in 2021 and 2022): they are therefore working towards aligning agendas on issues of common interest, such as connectivity and fight against terrorism. Relations between EU and India was also be discussed, including the reopening of negotiations for a bilateral Free Trade Agreement, and the recently adopted EU Strategy for Connectivity in Asia. Conte and Modi also discussed their projections for sustainable development in Africa, which lies at the heart of the foreign policy of both countries. Both India and Italy are stepping up their engagement in the continent, with the aim of managing migration flow — for Italy — and fostering developing cooperation — for India.
Modi and Conte also participated in the 24th edition of the Technology Summit organised by the Department of Science and Technology of the Ministry of Science and Technology, in partnership with the Confederation of Indian Industry. Italy is the partner country of this year’s Technology Summit, and its presence at the summit brought around 20 partners in the field of technology innovation and startups.
The Technology Summit aims at furthering cooperation in clean technologies, renewable energy, Information and Communication Technologies, healthcare, aerospace, education and cultural heritage. Participants discussed cutting edge technologies such as gravitational waves, bio-robotics, e-infrastructure and so on. Such interaction was intended to boost technology transfers, joint ventures, R&D cooperation and collaborations between industry and research institutions.
For Italy, the participation as the partner country represented an opportunity to expand from textile and design field to the space of technology and innovation. Examples of potential cooperation, where Italian niche technological know-how could be beneficial in the Indian context, range actually from conservation of cultural heritage to food processing or railway diagnostic and security.
Italy is the eighth largest economy in the world and the third largest in the Eurozone after Germany and France with a GDP of $1.86 trillion. It is also the world’s sixth largest manufacturing nation, dominated by small and medium enterprises clustered in many industrial districts. Characterised by the export of niche market and luxury products, the country has established itself as the eighth largest exporter globally.
Economic relations between the countries boosted in 2017, setting new record interchange level of $8.7 billion (+16% from 2016), driven by Indian exports to Italy which increased by 21%. Amongst EU members-states, Italy is India’s 5th largest trading partner (following Germany, Belgium, UK and France). Indian exports to Italy are driven by petrochemical, plastic, textile and steel. Italian exports towards India amount to 1% of Indian total import. Italy is the 27th global supplier to India, while is the 10th market of destination of Indian exports.
Italy’s presence in India counts over 600 Italian companies operating in the country, accounting for slightly less than $3 billion investment cumulatively between April 2000 and June 2018. Those investments are mostly in the automotive industry, trading, services, industrial machinery and food processing. Amongst the major recent Italian investments in India, ENEL Green Power is active in wind power provision in Gujarat, while Astaldi is expanding Mumbai subway. Railway safety, renewable energy, design, robotics, artificial intelligence clean technologies and packaging are also promising areas for cooperation, with the economic structures in both countries dominated by small and medium enterprises.
Analysts estimate a substantial growth of Italian export towards India, with an average of 6.7% increase between 2019-2021. The most prominent sectors will remain chemical, pharmaceutical, metal and plastic. Relevant will also be Italian exports in the field of transports, food processing, energy and telecommunications.
Italy hosts the third largest Indian community in the European Union, with an estimated 1,80,000 people, after the UK and the Netherlands. Indian labour is particularly active in the agriculture and dairy industry.
Despite current government’s intolerant propaganda, focused on opposition to migration, Italy remains a leading destination for Indian students whose number in Italian universities is indeed rising, with 50% of overall enrollment in engineering schools. The three universities attracting a higher number of Indian students are Milan and Turin Polytechnic Universities and La Sapienza University of Rome.
In six months’ time, the UK will be leaving the EU. This will represent a challenge for Indian investors: half of the stock of Indian investments in the EU is actually in the UK. Indian investors are therefore looking for an alternative entry points to access the EU market. Italy represents a perfect opportunity for that.
With this objective in mind, the Italian Ministry of Economic Development is setting up a fast track commission, headed by Deputy Minister Geraci — who is also part of the visiting team of PM Conte. The commission has the goal of facilitating Indian business investments in Italy and address the issues that Italian business face while entering Indian market.
After few difficult years, we are now entering a new phase of bilateral relations, which will hopefully lead to a strong partnership resistant to contingencies and changing political moods.
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Stefania Benaglia is Research Associate at the Italian Istituto Affari Internazionali (IAI). Her research focus is on EU-India relations South Asia EU foreign and security ...
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