When Italian Prime Minister Giorgia Meloni meets with Indian Prime Minister Narendra Modi on the sidelines of the G7 Summit, their discussions will cover several critical topics. Their primary objectives include strengthening defense cooperation, enhancing trade and investments, countering terrorism, and addressing issues related to the Indo-Pacific region.
India-Italy Bilateral Relations
Italy is actively engaging with the European Union’s Indo-Pacific Strategy and is eager to participate both economically and strategically. The relationship between India and Italy has seen significant progress in recent years. In 2022, Modi and Meloni met on the sidelines of the G20 summit in Bali, and Meloni visited India as a chief guest at the Raisina Dialogue in 2023, as well as attending the G20 Summit in New Delhi.
During her visit, India and Italy elevated their bilateral relations to a ‘Strategic Partnership,’ focusing on areas such as defense, the Indo-Pacific region, energy, and science & technology.
Responding to Financial Express Online, foreign secretary Vinay Kwatra said “In their bilateral meetings, the two Prime Ministers are expected to review the Strategic Partnership and its various elements, and one of the Strategic Partnership elements is defence, but that’s not the only element. There are other elements of bilateral engagement that would be reviewed by the two Prime Ministers.”
The upcoming talks between the two leaders are expected to address various topics, including food and energy security, defense cooperation, space technology, innovation, robotics, and artificial intelligence. As the two countries celebrate 75 years of diplomatic relations, discussions will also cover maritime security and green hydrogen.
India-Italy Defense Cooperation
Italy is keen to revive its defense trade with India. This comes after India lifted a ban on the Italian defense major Leonardo from doing business with the Ministry of Defence. In November 2021, Leonardo S.p.A. and its subsidiary AgustaWestland International UK were removed from the list of entities restricted from conducting business with the Indian Ministry of Defence. AgustaWestland is now merged with Leonardo.
Previously, India had lifted the suspension as the Indian Navy struggled to find alternatives for procuring 127mm naval guns and heavy-weight torpedoes. For India’s first indigenous aircraft carrier, INS Vikrant, the Italian company Fincantieri is the provider of know-how for capability enhancement and technology upgrade.
In 2014, the Ministry of Defence canceled a €546 million (US $624 million) contract with AgustaWestland International UK for the procurement of 12 AW-101 VVIP helicopters due to corruption charges. Now, Leonardo S.p.A is allowed to conduct business in India again. At the Aero-India 2023 event, Indian Defence Minister Rajnath Singh held talks with Italian State Secretary for Defence Matteo Perego Di Cremnago, highlighting the renewed defense cooperation between the two countries.
Concern Related to Pakistan -Italy Military Ties
India is particularly concerned about Italy’s sale of second-hand military platforms to neighbouring Pakistan. In April, Pakistan’s Minister for Defence and Defence Production, Khawaja Muhammad Asif, highlighted the potential for joint defense production with Italy.
According to reports in the public domain, since 2016, Pakistan’s main defence procurements from Italy included the Leonardo AW139 search-and-rescue (SAR) and utility helicopter, surplus M109L tracked 155 mm self-propelled howitzers (SPH), and some surplus armoured vehicles.
Additionally, a recent sea exercise between the Pakistan Navy and an Italian ship underscores the growing military cooperation between Pakistan and Italy.
Expanding Cooperation
India and Italy are keen to deepen cooperation on joint ventures, research and development, technology transfer, clean technology, renewable energy, information and communication technology, healthcare, aerospace, education, and cultural heritage. Italy, an important member of the European Union and a key trade partner of India, has more than 700 Italian companies active in India, employing about 60,000 people with an overall turnover of 9.7 billion euros. Major Italian companies in India include Ferrero, Fiat, CNH, and Perfetti. Italian industry sectors are looking to forge partnerships with India in food processing, alternative energy, clean water technologies, waste management, fashion design, and luxury segments, as well as innovation and start-ups.
Italy’s industrial setup, similar to India’s with a large number of small and medium industries, can easily integrate into the Indian market. Both countries can collaborate further in defense technologies and science. Italy possesses some of the finest defense technologies globally, and companies from both sides can engage in ventures under Prime Minister Modi’s ‘Make in India’ programme.
Bilateral Trade and Investment
Bilateral trade between India and Italy stood at US$15 billion in 2022-23, with India’s exports at US$8.691 billion, marking the highest level to date. Italy is India’s fourth-largest trading partner in the European Union. The focus is on promising sectors like food processing, textiles, design, manufacturing, and financial services. Indian investment in Italy is estimated around USD 400 million, with Indian companies mainly in IT, pharmaceuticals, electronics, manufacturing, and engineering sectors. Major Indian companies in Italy include Titagarh Industries, TCS, Mahindra, Ranbaxy, Bombay Rayon, ZydusCadila, Dr. Reddy’s Laboratories, Aurobindo Pharma Italia, Himatsingka Seide, Varroc Group, Endurance Technologies, Gammon, ABG Group, Aditya Birla, Raymond Zambaiti, and Sun Pharma.
The top items exported from India to Italy are iron and steel, telecom instruments, petroleum products, products of iron and steel, and auto components/parts. Principal items imported by India from Italy include industrial machinery for dairy, electric machinery & equipment, residual chemical & allied products, other miscellaneous engineering items, and machine tools. Italy is the 18th largest foreign investor in India, with a cumulative FDI inflow of USD 3.53 billion from January 2000 to December 2023.
Italy has joined key India-led global initiatives such as the International Solar Alliance (ISA), Coalition for Disaster Resilient Infrastructure (CDRI), Indo Pacific Ocean Initiative (IPOI), Global Bio-Fuels Alliance (GBA), and India Middle East Europe Economic Corridor (IMEEC), reflecting the growing convergence of views on important global issues.
With a focus on defense cooperation, trade, innovation, and global initiatives, the two nations are poised to enhance their strategic partnership and address mutual interests and global challenges.