India and Italy both are ancient civilizations but young states. These two ancient civilizations have known, interacted and traded with each other for over 2000 years. Modern day contacts between the two nations were formed through exchanges between the intellectuals from both sides. Both countries have significant economic, cultural, and strategic ties that have evolved over the years. In recent years, there has been a renewed focus on enhancing the relationship between the two nations, particularly in the areas of trade, investment, and defence cooperation.
The Indian community in Italy (estimated at 0.25 million including Persons of Indian Origin (PIO)) is the third largest community of Indians in Europe.
The 8th session of the India-Italy Foreign Office Consultations was held in February 2022 in Rome where the two sides reviewed the entire gamut of bilateral relations.
India and Italy agreed to explore the development of green hydrogen, setting up renewable energy corridors, and joint projects in the natural gas sector as the two nations sought to strengthen partnerships in energy transition.
During Prime Minister Giorgia Meloni’s visit to India in March 2023, ties between the two countries were elevated to a ‘Strategic Partnership’, a landmark for the two countries. The two Governments signed a Declaration of Intent on Migration and Mobility and announced the India-Italy Startup Bridge, among other outcomes.
There have been constant collaborations between India and Italy across sectors that have given impetus to bilateral trade relations. On the business front, there has been a series of trade delegations and government-led trade initiatives that have enabled Italy to successfully establish a more dynamic relationship with India.
Major Exported Items from India to Italy
- India exported 4,648 commodities to Italy in FY21.
- India’s export to Italy stood at US$ 8.18 billion in FY 2021-22.
- Major exported items from India to Italy include iron and steel (US$ 2,144.70 million); followed by nuclear reactors, boilers, machinery, and mechanical appliances; parts thereof (US$ 602.09 million) in FY21.
- India’s export to Italy stood at US$ 5.5 billion during April-November 2022.
- Major exported items from India to Italy include iron and steel (US$ 1,146 million) followed by telecom instruments (US$ 418 million) etc. during April-November 2022.
Major Imported Items by India from Italy
- India imported 5,290 commodities from Italy in FY21.
- Imports from Italy to India stood at US$ 5.045 billion in 2021-22.
- India’s imports from Italy include nuclear reactors, boilers, machinery, and mechanical appliances; parts thereof (US$ 1,759.35 million); followed by organic chemicals (US$ 287.76 million) in FY21.
- Imports from Italy to India stood at US$ 3.6 billion during April-November 2022.
- India’s imports from Italy include industrial machinery for dairy etc. (US$ 575 million) followed by residual chemicals and allied products (US$ 205 million) etc. during April-November 2022
Bilateral Investments
Italy’s presence in India has been historically strong thanks to important direct investments. Presently around 400 Italian companies are in India, through subsidiaries or liaison offices and often in Joint Venture with local companies. Italy is 17th largest FDI contributor to India.
Some of the major Italian companies that have invested in India are FIAT Auto, Heinz Italia, Ferraro, CNH Industrial, ENEL, FIOIA, Italcementi, Necchi Compressori, Perfetti, Lavazza and Fata Hunter Engineering, among others.
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.
The prominent Indian companies operating in Italy include Tata, TCS, Wipro, Engineers India Limited, L&T, Mahindra & Mahindra, Ranbaxy and Raymonds, among others.
Apart from this, six Italian Banks have representation in India. Moreover, India’s top sectors attracting FDI inflows are the automobile industry / transportation, food processing, metallurgical industry, textiles, electrical equipment, and others.
Potential for Collaboration
The potential for India-Italy bilateral relations is significant, and there are many opportunities for cooperation in various fields. As two vibrant democracies with shared values, India and Italy are well-positioned to deepen their partnership and contribute to peace and stability in the region and beyond.
India’s main exports to Italy include textiles, chemicals, and engineering goods, while Italy’s exports to India include machinery, chemicals, and transport equipment. In recent years, there has been an increase in trade in sectors such as renewable energy, aerospace, and defense.
There is also scope for collaboration in the fields of science and technology, research and development, and innovation. Italy is known for its expertise in fields such as design, fashion, and luxury goods, while India is a growing market for these products.
Cultural exchange is another important aspect of the India-Italy relationship. India and Italy share a rich history of art, literature, and cuisine, and there is significant potential for collaboration in these areas. India is also a popular destination for Italian tourists, with thousands of Italians visiting the country every year to explore its rich cultural heritage.
Overall, there is significant potential for India-Italy trade relations, and both countries can benefit from increased collaboration in various sectors.
To know more, read the CII publication on “India – Italy: Enduring Partnership”