Event ReportsPublished on Apr 19, 2018
Seventy years of India-Italy relations: What lies ahead

India and Italy both seem to be at a crossroads: while India’s economic and political sphere is transforming at a rapid rate under the Narendra Modi government, Italy is also facing a turbulent time with economic woes and the surprising re-emergence of the populist Five Star Movement. Given these parallels, ORF organised a brainstorming session on ‘Seventy years of India-Italy relations: What lies ahead’ on 28 March. The panel included Ugo Tramballi, Senior Advisor and Head of the Indian Program at the ISPI (Italian Institute for International Political Studies), Italy, and ORF scholars Professor Harsh V. Pant, Distinguished Fellow, Britta Petersen and Jayshree Sengupta, Senior Fellows. It was moderated by Gautam Chikermane, Vice President, ORF.

The geopolitics of India and Europe

The discussion began with Prof. Pant outlining the geopolitical dynamics between India and Europe. He remarked that this is an interesting phase in Indo-European relations -- while India has tried to open its policy towards Europe, Europe has become more inward looking. Unfortunately for both sides, this conversation is happening not at the most productive of times, as following Brexit and the rise of the far right parties throughout the region, there is an element of uncertainty about Europe’s future. Those on the outside have questions on how Europe will respond to these domestic challenges as well as address the changing dynamics in global leadership, a change which is happening at multiple levels. America, who was seen as the economic and security guarantor, seems increasingly reluctant to uphold this mantle, and China has suddenly emerged as a powerful force in shaping global politics. The most pertinent question for India is how it will approach this change as the impact of this shift is immense.

As a response to these challenges, Prof. Pant highlighted the fact that because India and Europe are considered to be a part of the same liberal space, the partnership between India and Europe in upholding the liberal order becomes a priority. India does not have the capacity to do it on its own.  While India has been trying to balance China out by building its internal capacity, it is not enough in the short to medium term. The policy response has therefore been to widen the network to engage with like-minded countries.

Prof. Pant further highlighted parallels between India and Europe through concerns over the emergence of Russia as a revisionist power. Like China is a first order priority for India, Russia is a first order priority for Europe. Russia is a front-line to Europe and the western world which was seen recently with the nerve agent in the UK. Thus, questions emerge on what sort of geopolitical matrix India and Europe can build together to respond to these challenges which are more similar than they may seem.

Italy and Europe

Britta Peterson examined the relationship between Italy and Europe. She observed that Italy is the ‘Achilles heel of Europe’ having one of the lowest growth rates at 1.5% with high youth unemployment at 30% and increasing debt at a worrying 133% of its GDP. Several factors have contributed to Italy’s current predicament, some of which include restrictive labour laws, high taxes and excessive red tape. Worsening the situation is the refugee crisis where Italy was left to deal with by itself as EU’s solidarity did not work for Italy or for the crisis itself.

She stressed that this year will be critical for European politics and Italy cannot be afford to take as long as Germany to form a government. Following Brexit, there has been a lot of political movement, the northern countries have proposed reforms for the Eurozone, and negotiations on the EU budget are to be held this year. Thus it is in the interest of Italy to have a government very soon as these issues impact Italy and therefore her voice is strongly needed.

Trade relationship

Jayshree Sengupta explored the economic relationship between India, Italy and Europe as a whole. She stated that India and Italy have been trade partners since the Roman era, and so it is unfortunate that India has such a low volume of trade and investment. She said as both India and Europe are facing Donald Trump on one side and China on the other, an economic partnership is crucial and must not be overlooked.

Sengupta said the potential of India and Italy as trade partners can be further explored if India and European Union (EU) sign the Bilateral Trade and Investment Agreement (BTIA) which has been in negotiation for over 11 years without conclusion. The main points of contention arise from India’s reluctance to open its markets in certain sectors in the way the EU wants, particularly in the dairy and manufacturing industries. Sengupta stressed that India cannot afford to implement these measures as being a developing country it has to protect domestic industries and jobs.

India-Italy 2.0?

Ugo Tramballi started his talk by highlighting the current connections between India and Italy which enjoy a vibrant diaspora on both sides. On the question of a reset in the India-Italy relationship, he remains unsure and setting up an India desk at Italy’s largest think tank ISPI is an attempt to rejuvenate this conversation and look into a nation that he considers neglected.

Commenting on the Enrica Lexie Case, where two Indian fishermen were killed by Italian marines in 2012, he said the event was a big mistake -- although it is unclear if the marines actually did shoot the fishermen -- this tragic fact quickly became politicised, first in Kerala and then in the rest of India. However, with that been said, Tramballi believes that the Italian Prime Minister’s visit last year led to a relative reset in India-Italy relations.

On Italy’s current position in Europe, Tramballi echoed previous speakers’ remarks stating that the situation is somewhat of a perfect storm. The political events in Italy are a part of a chain of dramatic political developments in Europe. The financial crisis, the uncertainty post Brexit, the rise of populism in Italy and throughout Europe, and the resurgence of neo-fascism in Eastern European countries all affect Italy.

On Italy’s current political instability, Tramballi said Italy has always had a history of instability, as for the last 50 years, the government was changed every six months, but the leaders were always the Christian Democrats and the resultant policies followed a similar trajectory. However, the current situation is a crisis: he does not know when a new government will be formed and Italy is in a very precarious position – with a nationalist, naturalist near fascist on one side and a populist movement on the other. He echoed Peterson’s remarks stressing that Italy needs a government to address the aforementioned EU issues, however he believes that Italy will focus on domestic issues instead. However, in closing, he said he considers himself to be a European citizen born in Italy.

The Modi factor

The discussion followed a highly debatable question and answer session where two major questions were asked: Why does Modi keep winning elections? Does India have a geopolitical grand strategy? On the first question, the consensus seemed to be that Prime Minister Narendra Modi has appealed  to the aspirations of India and his accessible personality and oratory skills with massive electoral management machine have allowed him to sell his political programmes to the people. The second question had a more nuanced answer as although this government has expressed the ambition to become a norm giver as opposed to a norm taker and shape the trajectory of global politics, the institutional constraints do not allow India to do long term strategic thinking as India is constantly dealing with a world in flux.

This report was prepared by Aastha Kaul, Research Intern, Observer Research Foundation, Delhi

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