Italy looks beyond trade in its economic ties with India

Written by Huma Siddiqui | Updated: Oct 29 2011, 09:27am hrs
The Italian government is expected to ink several agreements with India, including an MoU on road construction, during the 10-day visit to India by its multi-sectoral 280-member delegation starting next week. Ambassador of Italy in India Giacomo Sanfelice di Monteforte tells Huma Siddiqui in an interview that the two countries should move beyond trade and promote integration of their economies. Excerpts:

What is the trade target set for the next five years between the two countries

Italy is Indias fourth (largest) EU trade partner with bilateral trade worth 7.2billion euros in 2010. The trend is very positive. The first semester of 2011 has recorded 34% increase over the same period last year. However, we recognise that there is much potential still untapped. We aim at reaching the 10 billion euros target.

But our goal is yet more ambitious, we want to move beyond trade and promote integration of the two economies. This is why we are keen to see more joint ventures, mutual investments, technology transfers, fully integrated production chains and other innovative business agreements between the two countries.

Has Italy identified new sectors for cooperation

Yes, we have. But let us put things in context. In the first semester of 2011, Italy has been Indias 14th (largest) global foreign investor with a 15% growth against the same period in 2010. Considering the parallel marked decrease in FDI in India, this data is a clear indicator of a growing economic relationship. Notably, if we look at the FDI in India, that includes technology transfers, then Italy jumps to the fifth place globally, and this is a clear comment on the quality of our business ties.

However, in the new era of Indias growthwhere manufacturing will be the driving forceour relationship can be elevated to a strategic level. The industry associations have already struck a strategic alliance in line with the indications that have emerged from official bilateral talks. Together we have identified four priority sectors for G2G and B2B cooperation. These are infrastructure and building, conventional and non-conventional energy, automotive and machinery.

Moreover, the two sides intend to specifically encourage alliances between SMEs. In fact, SME growth, which intersects all sectors, is also a subject of bilateral cooperation. The articulated organisation of the Italian district can inspire SME growth in India. Given that in Italy the SME network accounts for 60% of the GDP, while in India it is at 20%, it is clear that cooperation in this sector can help make Indias economic development faster and more inclusive.

What about opportunities for cooperation in the agriculture sector

There is no doubt that Indias agri-food segment can benefit from Italys long standing experience in all areas of food-processing, cold storage technology and cold-chain logistics. For instance, Italy produces some of the worlds best processing chain systems for fruits and vegetables and many Indian companies are already availing the Italian expertise.

What kind of incentives does your country offer to the foreign investors

Talking of foreign investors, Italy is a host to a growing number of Indian companies. The countrys location is in itself a unique incentive, as it functions as a crucial link by road, by air and by sea - not only to Europe but to the whole Mediterranean cost, including North Africa and West Asia. Some Indian companies have already taken advantage of this X factor and have headquartered their European distribution logistics in Italy.

About financial incentives, the Italian government provides a compelling range of aid programmes spanning from tax credits to grants and loans that fit the need of diverse business operations. Most incentives are managed by Invitalia, an agency in charge of assisting new investors.

Is getting a business and tourist visa easy

Italy belongs to the Schengen area and as long as the prescribed Schengen parameters are adhered to, getting a visa to Italy, whether for tourism or for business, is not difficult. In terms of business visas, however, we have implemented in India a fast-track system, which is essentially a step towards hassle-free processing for companies that have business interests in Italy. In addition, top managers of such companies are granted the longest possible duration that the system allows as a matter of routine.