Extending boundaries with Italy-India trade relations

By OEM Update Editorial April 30, 2024 7:12 pm IST

Italy has invested almost 18 billion euros in India over the last decade, primarily in car components, automotive, engineering, construction infrastructure machinery, metal woodworking, MHE, and agriculture. Claudio Maffioleti, from the IICCI, believes that this investment trend will continue to grow in the coming years, driven by the growth of Indian manufacturing and its visible potential.

Please brief us about India-Italy trade relations and how this relationship aims to progress.

There has already been a notable upsurge in investment between Italy and India to the point where their bilateral trade has reached a record 15 billion euros. The result is due to a sharp rise in Indian exports of semi-finished and raw materials to Italy (10 billion euros), compared to 5 billion euros in Italian exports to India.

Italy’s top exports to India are sports automobiles, furnishings, design, and glitzy fashion. Italy’s primary focus is hard-core manufacturing machinery and technology in India and worldwide. Italy is a manufacturing nation, ranking among the top five in the world and the second largest in Europe. As such, Italian businesses have a stronger foothold in India’s manufacturing sector. About 18 billion euros have been invested by Italy in India over the last ten years, mainly in the fields of automotive components, engineering, construction, infrastructure machinery, metalworking, material working machines, and the whole agriculture-food value chain.

About 800 Italian investments exist in India, with 40–45 percent in manufacturing facilities. The Italian enterprises that operate in India provide jobs and investment. There are around 350 Italian plants in India. These enterprises also contribute great expertise in technology transfer and talent development to the Indian sector.

How does the Italian Tech in India exhibition strengthen collaboration between Italy and India, particularly in the manufacturing and technology sectors?

Collaborations like the Italian Tech in India exhibition are beneficial because they highlight the work that Italian and Italian companies are doing in those particular areas, which benefits both the Italian companies and the Indian manufacturing sector.

Italian Tech in India is in its second edition. The second edition was held in Pune, the hub for Indian manufacturing. This region also has the highest concentration of Italian and European investment. Indian ecosystem is sufficiently mature now to allow for these kinds of endeavours and exchanges.

Italian exhibitors regard these collaborations as more of a nation-branding exercise than a commercial show. Through the efforts of Italian businesses to present what Italy has to offer the nation from their point of view in the Indian market, we are uniting Italy under one roof. We have businesses that have invested in India at various points in their history; most are well-established businesses that have already taken up a sizeable portion of the market in their respective industries. Italian entrepreneurs are all happy with the way the Indian market is doing. They all have ambitious goals for the next three years, with a 50–100% increase in turnover from where they are now.

Pune will continue to be our focal point, but Bangalore is also a possibility for more collaborations. We recently established a new office in Bangalore, specifically managing sophisticated production, focusing on aerospace and cutting-edge industrial technology.

What kinds of employment opportunities are created by the collaboration of this kind?

Growth necessitates the demand for talent and labour. There will be increasing job opportunities in India’s Italian ecosystem. Given the country’s gradual opening to industry, some Italian universities operate in India. These universities provide management programmes compatible with the Italian industrial ecosystem.

How does the IICCI facilitate business connections and investments between Italy and India?

The Indo-Italian Chamber of Commerce and Industry is an association of enterprises and professionals comprising members from Italy and India. We offer a community – a human network. Italian businesses are open to making investments in India. The number of Indian companies looking to invest or buy out Italian companies in Italy is also on the rise. Our Association offers a network of contacts, including professionals, solicitors and chartered accountants, to help establish a business and facilitate communication with companies in related or unrelated industries with a common mindset. This allows them to share experiences, discuss issues or ask questions about how to proceed with an investment. We are in the centre of this expanding Indo-Italian commercial community. As an association, we collaborate with member companies and groupings of companies. We engage in exercises to promote branding.

How do you address the challenge of attracting engineers and upskilling them?

Indian universities produce lakhs of engineers yearly, yet only a tiny percentage of these engineers choose to work in manufacturing; instead, they opt to work in the computer science, IT, and service sectors. Most likely as a result of the facility’s unattractive production environment. Modern infrastructure and technology are things that all foreign investors, Italians, and Europeans, generally do for the world. Everything in the factory is optimised, including the large fans and controlled air conditioning, which makes working there even more enjoyable.

With the advent of technology, physical labour has been reduced. Italian businesses are known for paying close attention to the local business area. Even without clear-cut regulations and a strict regulatory framework, Italian companies have historically placed a high value on corporate social responsibility and have a very high level of engagement with the local community and stakeholders.