Prime Minister Narendra Modi’s visit to Italy on October 30-31 will not only see him participating in the G20 Summit in person but also engaging with the Italian leadership on key bilateral issues including mobility of Indians, defence partnership and closer ties in sectors such as small and medium enterprises and agriculture.
With the two countries overcoming challenges in the relationship caused by the Italian marines case, the stage is set for elevating the partnership to the next level based on the virtual summit last year, said people aware of the matter.
Modi’s forthcoming visit to Italy, his first to Europe since the outbreak of Covid-19, which was planned earlier but postponed due to the pandemic, will open up a slew of opportunities across sectors with one of India’s top partners in Europe, said the people. The last time an Indian PM visited Italy was Manmohan Singh in 2009.
Immediately after the upcoming trip, the PM plans to visit Glasgow for the COP26 Summit in early November.
Last year, India and Italy had signed 15 memorandums of understanding, covering areas such as energy, media, finance and shipbuilding, coinciding with the virtual summit in November.
There is an effort to revive defence partnership, as evident in last year’s virtual summit, said the people. Army chief General MM Naravane visited Italy in July and inaugurated an Indian Army memorial in the town of Cassino. The memorial has been built to pay homage to the Indian soldiers who lost their lives during World War II.
Defence ties with Italy – which took twin hits with the AgustaWestland scam and the Italian marines case – were revived after an eight-year gap in 2018. Prior to the banning of Finmeccanica (now Leonardo) in 2013 in the aftermath of the VVIP chopper scandal, Italy had significant interest in the Indian defence sector, ranging from maritime systems to radars and avionics to land systems. With the revival of defence ties, the two sides are looking for joint military cooperation, including the sale or joint development of arms and equipment.
Italy is also keen to partner India for its initiatives in the Indo-Pacific region and has launched a trilateral with Japan – India is part of another such trilateral comprising European power France and Australia. These partnerships are part of attempts to create stability and a rules-based international order based on the consent of all, not on the power of the few, in the Indo-Pacific region. Italy wants to foster a stronger cooperation between the Mediterranean and the Indian Ocean as part of its Indo-Pacific vision.
Italy is among India’s top five trading partners in the European Union. The balance of trade has been in India’s favour since the early 1980s. The bilateral trade witnessed a strong growth till 2007, before the worldwide recession of 2008 led to a marked slowdown in Italian economy.
Last year, the bilateral trade was hit by the Covid-19 pandemic. India ranks 19 as a country of origin of Italian imports, accounting for 1.2% of Italian imports. Indian exports to Italy mainly comprise ready-made garments, leather, iron ore, motor vehicles, textiles, chemicals and gems and jewellery.
Italy’s exports to India are general and special purpose machinery, machine tools, metallurgical products and engineering items. About 140 large Italian companies are active in India, in sectors such as IT, electronics, pharmaceuticals, automobiles, textile and engineering. Fiat Automobiles, Heinz Italia, Perfetti, Lavazza, Piaggio and Ferrero are some of them.
Prominent Indian companies operating in Italy include Tata, TCS, Wipro, Engineers India Limited, L&T, Mahindra & Mahindra and Ranbaxy. State Bank of India has a representative office in Milan, whereas six Italian banks have representation in India.
The top sectors attracting foreign direct investment from Italy are automobile and transportation, food processing, metallurgical industry, textiles and electrical equipment.
The Indian community in Italy, estimated at 240,000, is the third largest community of Indians in Europe after the UK and the Netherlands. According to official Italian data, people of Indian origin comprise the fifth largest foreign community in the country. As first generation migrants, the majority of them are engaged in economic sectors such as agriculture, dairy farming, leather industry and construction works, and in service industry.