The natural synergy between India, Italy

Written by Subhash Agrawal | Updated: Feb 4 2006, 05:30am hrs
Even though we often tend to overplay the attention India gets abroad, there is no mistaking the fact that it is a rather happening place in global consciousness these days, and not only in Davos. Lately, the country has averaged at least one major foreign delegation per week, usually a head of state accompanied by an impressive business contingent that is eager to tap into the galloping middle class story of the new India. But what happens once these delegations go back Is there a better definition of business potential Is there greater appreciation of cultural similarities or differences

Sometimes, not always. However, in terms of post-summit spin-offs, Italy is possibly an exception. It was precisely one year ago that Italy sent to India one of its largest business delegations ever to any foreign country.

Since then, continuous business contacts, bilateral meetings and showcase events have kept the momentum going. In this period, not only has trade between India and Italy grown a respectable 20% (and may soon touch euro 4 billion) but an impetus has also been injected into the bilateral equation, with the announcement of a fairly landmark Fiat-Tata marketing agreement.

Meanwhile, many Italian firms are quietly checking out India. One of them is Charme, a family-held investment fund that owns an array of super-premium Italian brands, including the renowned Poltrona Frau and Cappellini luxury furniture.

To give an idea of how exclusive and pedigreed these labels are, 13 out of 35 pieces of modern furniture in the permanent collection of the Museum of Modern Art in New York are theirs.

During his recent trip to India to attend a conference on luxury good sector, Matteo Montezemello, the charming CEO of Charme and a veritable global personality, was impressed by Indias potential. Impressed, but not bowled over.

He realises the challenge of production, distribution and pricing of a premium line, especially in a country with huge economic contrasts.

But at least he is here, to explore if not to set up shop right away. As our Italian vintners, eager to sell bottles of Valpolicella, Chianti, and Barolo to an urban elite that has taken to wine and other forms of European lifestyle in a big way.

A significant reason for the momentum of the India-Italy relationship is the social and cultural similarity. Lets start with a macro socio-political view: it is difficult to change either country or to get things done very speedily. Both societies are shaped by a consciousness of their antiquity and traditions, and both possess a strong bureaucracy, circles of power that are not always so transparent, and a tradition of fragile coalition governments that are cautious by nature. Plus, labour unions in both appear unmindful of global realities, sulking and protesting at the drop of every hat. The headline Nation Paralysed by General Strike could be in reference to either Italy or India, and there is a sense of the absurd theatre to labour demands.

There is an old tradition of scholarship and questioning in both societies, a sort of virtuous pursuit of debate and logic for their own sake.

Both have valued learning, though this has traditionally been practiced by a narrower elite in India, largely due to the caste system. While Italy was the birthplace of both the Enlightenment and the Renaissance, the thoughts from these periods find a remarkable echo in Indian writing and traditions across many centuries.

There is much to criticise in Indian traditions, just as there is so much to praise, but in one respect India is so much more aligned with the West than China is. The Chinese tradition, emanating from Confucian thought, gives primacy to the state and to social harmony, while the Indian tradition, like in the West, gives primacy to the individual, debate, dissent and even scepticism.

This similarity in the individual psyche between India and the West is often hidden by the rigours of daily life and poverty in India, but it exists. India may be a talkative, contradictory and even argumentative society, and hence confusing to outsiders, but it is far more western than almost any other country in Asia. There is an unspoken sense of individual freedom, personal space, morality and democracy.

Crucially, there is the structural similarity. Both have a large entrepreneurial base of small firms that constitute the bulk of employment and manufacturing. But the real clincher is the value-chain fit.

In light of rising costs and competition from China, the obvious was for Italian firms to compete is to sub-contract production to a country like India while focussing on innovation, research and development and all sorts of higher-value activities, the kind of thing that once made Italy a power house of design and which are difficult to copy.

Despite these natural synergies, the level of India-Italy business is well below potential, according to those in the loop.

For instance, more than twice as many Italians visit the Maldives as India, while Indians virtually know nothing about Italian agritourism which has a vast network of charming and cheap destinations.

The situation begs for a people-to-people thrust that exposes both sides to the feast of culture, diversity and discovery that each side offers to the other.

The writer is editor, India Focus