Sharma-led biz delegation to cement ties with Italy

Written by Huma Siddiqui | New Delhi | Updated: Feb 1 2011, 04:51am hrs
With the European Union seeking to re-configure its business focus to emerging markets and economic powerhouses like India to forge win-win partnerships, commerce and industry minister Anand Sharma is leading a CEOs delegation to Italy on Monday.

The delegation headed by Ficci president Rajan Bharti Mittal is being organised to pursue Ficcis long-term economic agenda that seeks to catapult Indias economic engagement with Italy in trade, investment and partnerships.

Amit Mitra, secretary general, Ficci, said,Italys technological edge and creative energy are attractive than ever before. Our deliverable with this visit is not only to expand the numbers in bilateral trade or investment. It is an effort and a first step in the direction of achieving the quality of partnership that is potentially possible. It is for that goal that we shall meet our counterparts, policy makers and partners.

The delegation will comprise top CEOs representing telecom, hospitality and tourism, fashion, aviation, healthcare services, manufacturing and automobiles, textiles, energy, including alternative sources of energy. The delegation will have a day and half of political and institutional appointments in Rome followed by a visit to a dominant financial and economic centre Milan.

The delegation is expected to call upon Italian minister of economic development Romani, minister of foreign affairs Franco Frattini, and Italian PM Berlusconi.

Italy is country's 22nd largest trade partner globally and 5th largest in the EU. India and Italy have a growing trade relationship but it is still an under performing relationship considering Indias booming economy and demand and Italys potential for productivity gains and internationalisation which will lead to a greater domestic and industrial demand and hence for Indian exports.

In terms of trade, there was an interruption and significant decline in trade relations in the first year of the international downturn. In 2009, bilateral trade declined by 13.22%. But trade has picked up in 2010 and grew by 24.43% in January-September 2010 to euros 5.09 billion. Indian exports stood at euros 2.78 billion and Indian imports stood at euros 2.31 billion. Though exports and imports are roughly balanced, the trade balance has been in Indias favour since the early eighties. India accounts for 0.94 % of Italian exports and Italy imports 1.05% of global imports from India.

In terms of investment, there has been a steady increase in FDI into India. Italy ranks 12th largest overall & 6th largest in EU in Indias FDI ranking. The key sectors include transportation (57%), food processing (9%), metallurgical industries (8%) and textiles (5%). A positive feature of the nature of Italian FDI is that the investments relate primarily to industrial set-ups.

Studies reveal that the internationalisation of SMEs is a challenge for Italy. The constraints are financing and risk cover to innovation and the search for new markets. This can easily be addressed through partnerships between Indian and Italian firms. This will also address the problem of access to emerging markets, where Italian SMEs have so far held back.