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India-Italy Ties at a Historic Inflection Point: A Bold Opportunity for Deeper Strategic Cooperation
India-Italy ties at an inflection point
Context: India and Italy are witnessing a strategic upswing in their relationship, marked by deepening political, economic, technological, and defence engagements.A Joint Strategic Action Plan has been adopted to guide long-term collaboration across diverse sectors. The increasing frequency of high-level political engagements, including five meetings between PM Narendra Modi and Italian PM Giorgia Meloni in two years, reflects growing strategic trust.
Ancient Civilizational and Historical Linkages
- Both India and Italy are cradles of ancient civilizations, with robust cultural and trade exchanges dating back millennia.
- Discovery of Roman gold and silver coins in India highlights early Indo-Roman trade relations.
- These ancient links provide a historical foundation for building modern ties based on mutual respect and shared heritage.
Contemporary Diplomatic Engagements
- There has been a surge in high-level visits, including the recent trip of Italian Deputy Prime Minister Antonio Tajani with a business delegation.
- India and Italy have agreed on a Joint Strategic Action Plan, showcasing a structured approach to deepen cooperation.
- Strong top-level engagement has laid the groundwork for sectoral synergies and institutional partnerships.
Current State of Bilateral Relations: Sectoral Overview
- Trade and Investment
- Bilateral trade in FY24 reached $14.6 billion, with India exporting $8.8 billion and importing $5.8 billion.
- Italy is India’s 4th largest EU trading partner, after Germany, Belgium, and the Netherlands.
- Cumulative FDI from Italy (April 2000 – Sept 2024) stands at $3.51 billion, making Italy the 19th largest investor in India.
- Key sectors of Italian FDI:
- Automobile (29.8%)
- Trading (17.1%)
- Industrial machinery, Services, Electrical equipment
- Business Presence
- 600+ Italian companies operate in India, focusing on sectors like manufacturing, machinery, and infrastructure.
- 100+ Indian companies are active in Italy, with $400 million in investments, mainly in IT, pharmaceuticals, electronics, and engineering.
Emerging Areas of Bilateral Cooperation
- Fashion and Lifestyle
- Italy’s fashion industry constitutes 10% of its total exports.
- Growing Indian demand for luxury goods creates opportunities for Italian fashion houses.
- Potential for collaboration with India’s textiles and garments sector for mutual value creation.
- Railways and Transport Infrastructure
- The Make-in-India initiative is strengthened through Indo-Italian JVs like Titagarh Fireman, producing metro coaches for Pune Metro.
- Hindalco-Metra SpA collaboration promotes aluminium extrusion technology for Vande Bharat trains.
- Future cooperation areas:
- High-speed rail corridors
- Station modernization
- Heavy haul and rail infrastructure development
- Food Processing Industry: Italy’s advanced food packaging and processing technologies can support India’s rapidly growing food processing sector.
- Defence and Strategic Industries
- MoU between Fincantieri and Cochin Shipyard Limited (CSL) for shipbuilding collaboration.
- Other active Italian defence firms in India: Leonardo, Elettronica, Simmel Difesa, Wartsila, Ferrino, Beretta
- Indian MSMEs are exporting small arms components to Italy, aligning with India’s aim of defence indigenization and self-reliance.
- Science, Technology, Innovation, and Space
- Joint Strategic Action Plan includes collaboration in:
- Scientific research
- Innovation and emerging technologies
- Space exploration
- Joint Strategic Action Plan includes collaboration in:
Strategic Importance of Italy for India
- Italy holds a geostrategic position in the Mediterranean, offering India a gateway to Europe and North Africa.
- As a member of the G7, EU, and NATO, Italy enhances India’s multilateral engagement platforms.
- Italy’s technological and industrial strengths, especially in defence, infrastructure, and design, complement India’s development priorities.
- Collaboration with Italy strengthens India’s role in global value chains, especially under the “Europe + 1” diversification strategy.
- Tourism and People-to-People Ties
- India has 10 million FTAs, compared to Italy’s 60 million, highlighting India’s untapped tourism potential.
- Italy’s experience in tourism infrastructure and marketing can help revamp India’s tourism industry.
- Enhanced collaboration in culture, media, and entertainment to boost mutual understanding.
- Maritime and Land Connectivity: Role in IMEEC
- Italy can be a crucial partner in the India-Middle East-Europe Economic Corridor (IMEEC).
- IMEEC aims to:
- Boost strategic connectivity
- Enhance logistics and port infrastructure
- Integrate cutting-edge maritime technologies
- India’s plan to expand port capacity to 10,000 million tonnes annually by 2047 creates opportunities for Italian firms in:
- Smart ports
- Shipping logistics
- Green maritime technologies
