INDO-ITALIAN BILATERAL ECONOMIC RELATIONS
With a GDP growth of 8,5% in the fiscal year 2010/2011, India is one of the most promising markets for international trade and foreign investments. The mix of ingredients that make India the second fastest growing economy (after China) include high private saving and investment rates, a rapid growth of the labour force, a strong domestic demand sustained by a rising middle class and a good performance of Indian exports. A few critical areas, however, remain, such as high inflation, insufficient infrastructure, a complex bureaucratic environment, the need to keep public expenditure under control.
BILATERAL TRADE
With regard to bilateral trade relations, India is becoming more and more important for “Made in Italy” export. Figures relating to Italian exports to India are impressive: scoring a 45% growth in the fiscal year 2007-2008, Italian exports almost doubled in very a short time. After a slight decrease in 2009, due to the international economic and financial crisis, bilateral trade almost touched 28% growth in 2010, with exports from Italy to India rising by 24% and imports from India to Italy by 30%. Total bilateral trade peaked at 7.2 billion Euros, overtaking the pre-crisis value. Italy is presently India’s fourth trading partner among the EU countries, which all together are for India the first destination and import market.
There is still large scope for a much higher presence of Italian products in the Indian market and the unexploited potential is huge.
Looking at the main items of trade, machine tools are Italy’s first export item, representing around 40% of total Italian exports to India. Other relevant items are: motor vehicles, chemical products, metal products, electronic products. Textile and clothing traditionally represent the first import item from India to Italy (around 20% of total Indian exports to Italy)
FOREIGN DIRECT INVESTMENT
Foreign Direct Investments (FDIs) to India have been constantly increasing during the last decade, due to the expectations of growth of the Indian economy and thanks to the ongoing liberalization process.
Nonetheless, with a 15% growth in FDI flows to India, Italy’s performance in 2010 appears positive. In 2010 Italy ranked 7° among the EU countries as for the value of FDI to India.
Italy’s presence in India has been historically strong thanks to important direct investments. Presently around 400 Italian companies are located in India, through subsidiaries or liaison offices and often in Joint Venture with local companies. Among them we can find all the major Italian industries such as, for example, in the automotive sector – FIAT, Piaggo, Magneti Marelli, Pirelli, New Holland, Carraro; in the food sector - Ferrero, Lavazza, Perfetti Van Melle; in the fashion industry - Luxottica, Benetton, Coin and all the major italian luxory brands; in the defence sector - Finmeccanica Group, Elettronica and Fincantieri; in infrastructure and construction -Italcementi, Tecnimont, Prysmian, Techint; in electronics -STMicroelectronics.
Moreover, Italian Small and Medium Enterprises have been recently showing a strong interest and a new vitality towards the Indian market.
Italian companies are mainly concentrated around New Delhi and Mumbai/Pune, however other industrial poles are emerging, such as Chennai and Bangalore.
INSTITUTIONAL VISITS AND BUSINESS MISSIONS
A new season of bilateral missions kicked off at the end of 2010 with the visit to Italy of former Indian Minister for Road Transport and Highways, Hon’ble Kamal Nath, and it has continued thereafter.
· 31 January – 1 February: Indian Minister for Commerce and Industry, Hon’ble Anand Sharma, visited Rome and Milan, accompanied by a high level business delegation, headed by the former President of the Federation of Indian Chambers of Commerce and Industry (FICCI). Bilateral meetings were held with the Italian Minister of Foreign Affairs, Hon’ble Franco Frattini, with the Minister of Economic Development, Hon’ble Paolo Romani, with the President of the Chamber of Deputies of the Italian Parliament, Hon’ble Gianfranco Fini, with the President of Lombardy Region, Mr. Roberto Formigoni and with the former Mayor of Milan, Ms. Letizia Moratti.
· 21-24 March 2011: a business mission focused on infrastructure and energy, promoted by Confindustria (the Italian nationwide confederation of industries), took place in Delhi and Mumbai.
· 17-21 April 2011: a business mission focused on the automotive sector, promoted by Confindustria, took place in Delhi and Pune.
· 2-3 June 2011: the Indian Minister of External Affairs, Hon’ble SM Krisha, visited Rome, on the occasion of the celebrations for the 150° anniversary of the unification of Italy. A bilateral meeting with Italian Minister of Foreign Affairs, Hon’ble Franco Frattini, took place.
· 23 June 2011: the Indian Minister of Power, Hon’ble Sushilkumar Shinde, visited Rome and met the Italian Minister of Economic Development, Hon’ble Paolo Romani. Minister Shinde also took part in a round table with Italian companies organized by Confindustria.
· 8 July 2011: visit to Italy of the Minister of State for External Affairs, Hon’ble Preneet Kaur, and bilateral meeting with Italian Undersecretary for Foreign Affairs, Hon’ble Stefania Craxi.
Such an incremental process of enhancement of Indo-Italian bilateral relations will culminate with an Italian “Country Promotion Mission” to be held from the 31st of October to the 3rd of November, promoted by the Italian Ministry of Foreign Affairs, the Ministry of Economic Development, Confindustria, ABI (the Association of Banks of Italy), ICE (the Institute for the Promotion of Foreign Trade).
The Mission will have two legs, Delhi and Chennai, and it will be focused on a few strategic sectors: infrastructure, conventional and non-conventional energy, defence, automotive, machine tools (with regard specially to the agro-food area). Furthermore, a special seminar on the cooperation between SMEs of the two countries is foreseen.
INDIA-ITALY JOINT COMMISSION FOR ECONOMIC COOPERATION
The bilateral institutional dialogue on economic matters of mutual interest is also regularly carried through in the framework of the India–Italy Joint Commission, co-chaired by the Minister of Economic Development of the Italian Republic and the Minister of Commerce and Industry of the Republic of India. The XVIII session of the Joint Commission was held in New Delhi on the 14th of December 2009 The Joint Commission is an extensive tool, which allows tackling bilateral problems and developing ways of cooperation on a wide range of issues: from promotion of bilateral trade to industrial cooperation in various areas (tourism, infrastructure, civil aviation, agriculture, design, textile, to mention a few), from the protection of intellectual property rights to financial cooperation and cooperation in the field of business visas.