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Home / IAS Preparation / India Italy Relations

India Italy Relations: Everything You Need To Know For UPSC CSE Exam!

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The India Italy relations are significant in today’s world dynamics. India and Italy enjoy a multi-faceted economic relationship covering trade, investment, technology collaboration and people-to-people contacts. While the COVID-19 pandemic caused some disruption, bilateral economic activities have bounced back quickly as both countries recover.

This article tells about India Italy relations in detail. It's helpful for students preparing for the UPSC CSE Exam. If you want more help to study for the exam, you can join UPSC Coaching.

History Of India Italy Relations

India Italy relations date back thousands of years. In ancient times, trade links existed as India exported spices, textiles and pearls to Rome and imported Italian Mediterranean goods. Italy, then divided into city-states, recognized the Mauryan Empire in India as a major power under Emperor Ashoka in the 3rd century BC.

  • In the 15th century, the Portuguese explorer Vasco da Gama landed in India, establishing the first European colony and trade ties between India and Italian city-states like Venice and Genoa. Italian merchants brought silk and metals to India and took back Indian commodities like spices and textiles. This established Portugal as the first European colonial power in India. Italian cities like Venice and Genoa also started sending merchants to the subcontinent. This trade continued under European colonialism.
  • The modern diplomatic India Italy Relations began in 1947 when India gained independence from British rule. Italy was one of the first countries to recognize the new Indian republic. Since then, both countries have developed close political ties. They cooperate on issues at the United Nations and other global forums. Italy has supported India's request to join the Nuclear Suppliers Group and UN Security Council as a permanent member. Both nations work together at international forums.

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India Italy Trade Relations 

India Italy trade relations have a long and extensive history. In modern times, India Italy Relations have flourished through economic means. Italy is currently one of India's top trading partners in the European Union.

  • Two-way merchandise trade between India and Italy amounted to US$9.52 billion in 2020-21. Major Indian exports to Italy include textiles, gems and jewellery, machinery and mechanical appliances, pharmaceuticals, vehicles and parts, iron and steel products, coffee/tea/spices, and chemical products. Italy's main exports to India include machinery, textiles, metals, non-metallic minerals, electrical machinery, plastics, chemicals, and transport equipment.
  • Italy is among the top ten global suppliers of machinery, appliances, pearls/precious stones, textile yarn/fabrics/made-ups, and metal scraps to India. It is also the 7th largest investor in India, with a cumulative FDI inflow of US$2.8 billion between April 2000 and 2021. Key sectors attracting Italian FDI into India include automotive, infrastructure & construction, textiles, industrial machinery, chemicals, and food processing.
  • Major Indian investments in Italy are in the industrial machinery, automotive, chemicals, metal products, and textile industries. Over 600 Italian companies have a presence in India, indicating strong and growing economic engagement between the two sides.
  • Both countries aim to expand bilateral trade to US$15 billion by 2025. The proportion of bilateral investments is also expected to grow in the coming years as India and Italy ramp up economic cooperation across priority sectors.

Institutional Mechanisms

India Italy relations in economic front is facilitated through various bilateral institutional mechanisms such as the India-Italy Joint Commission for Economic Cooperation. The commission provides a high-level platform to discuss trade, investment and economic issues between the two nations. So far, 14 sessions of the Joint Commission have taken place.

In November 2020, India and Italy held their first Virtual Summit between Prime Ministers Narendra Modi and Giuseppe Conte. The two leaders reviewed the entire aspect of India Italy Relations and set an ambitious agenda for expanding cooperation in trade & investment, defence, S&T, energy, and people-to-people exchanges. Both sides also inked 15 agreements/MoUs to advance ties.

Areas of Cooperation In India Italy Relations

India and Italy actively collaborate in several areas to strengthen economic and commercial linkages:

  • Investment Promotion: The two countries are working to encourage greater investments and technology transfers in sectors like infrastructure, renewable energy, food processing, machine tools, and automobiles. Initiatives like Make in India, Start-Up India, and National Infrastructure Pipeline, provide attractive avenues for Italian companies to invest in India.
  • SME Cooperation: MSMEs are the backbone of both the Indian and Italian economies. The two nations are collaborating to boost SME linkages in fields like machinery, textiles, chemicals, infrastructure, food processing, furniture, packaging, and construction.
  • Circular Economy: India and Italy have identified the circular economy as an important area of future cooperation. Joint initiatives in sectors like urban waste management, high-tech recycling, and environmental services are being explored.
  • Renewable Energy: Italy's expertise in areas like solar, wind and geothermal energy complements India's ambitious renewable energy goals. Closer collaboration in R&D, manufacturing, and project implementation is envisaged.
  • Transport Infrastructure: Italy is a global leader in railways, roads, ports, and tunnel construction. Indian and Italian companies are partnering under initiatives like Sagarmala to upgrade India's transport infrastructure.
  • Food Processing: India offers opportunities for tie-ups in farm technology, cold storage, and food packaging/processing, given its large agricultural sector. Italian firms are showing interest in investing in India's food processing industry.
  • Tourism: There is tremendous scope to expand bilateral tourism by enhancing air connectivity and undertaking joint marketing efforts. Both governments are looking to tap into their rich cultural heritage and growing middle classes to boost tourist flows in both directions.

Challenges In Italy And India Relations 

While economic and commercial ties between India and Italy have strengthened considerably over the past two decades, there is potential for even greater growth. Some of the challenges in the italy and india relations include:

  • Low bilateral trade volume compared to potential
  • Limited awareness among businesses about opportunities on both sides
  • Language barriers and cultural unfamiliarity
  • Access to finance, especially for SMEs exploring partnerships
  • Differences in business practices, laws and regulations
  • High logistics and transportation costs impacting trade.

The governments, industry associations and businesses of both countries are working to actively address these issues through policy reforms, capacity-building initiatives, B2B connect programs and awareness drives.

Bilateral Relations Between India And Italy 

India Italy Relations are significant in the fields of scientific cooperation, culture and defence. The two countries actively collaborate in these areas to deepen their overall strategic partnership. Let us look at the bilateral relations between India and Italy.

Science and Technology Cooperation

India and Italy signed an agreement on scientific and technological cooperation in 1976. Since then, both countries have undertaken various joint projects and partnerships in fields like renewable energy, biotechnology, healthcare, aerospace, physics, metrology and others.

Some key examples include:

  • Joint clean energy research on solar cells, smart grids, hydrogen production and biofuels.
  • Biotechnology research on tropical diseases, marine biotech and genomics.
  • Scientific collaboration between space agencies ISRO and ASI on satellite navigation, earth observation and moon missions.
  • Partnership in physics research between Indian and Italian institutes and laboratories.
  • Joint initiatives in metrology for standards in measurement and testing.
  • Exchange of scientists, researchers and students between premier institutes of both countries.

To further boost India Italy Relations, India and Italy have set up joint mechanisms like the Programme of Cooperation in Science & Technology and the India-Italy Science & Technology Joint Committee. The two sides also signed an MoU in 2020 on cooperation in environmental research and technology development.

Cultural Cooperation

India and Italy share close cultural linkages spanning centuries. Italian scholars have researched various aspects of Indian culture, while Indian monks and traders once brought Indian culture to Italy.

Some ongoing cultural cooperation activities include:

  • Archaeology collaboration with a focus on the conservation and restoration of monuments.
  • Exchanges and training programs between museums, archives and libraries.
  • Partnerships between art galleries, opera houses and cultural institutes.
  • Scholarships and fellowships for students/artists to pursue cultural studies.
  • Promotion of each other's culture through films, dance, music, theatre, exhibitions and food festivals.
  • Cooperation to stop illicit trafficking of cultural properties.
  • Support for the study of languages, histories and cultural heritage.
  • Conservation of UNESCO-listed monuments in both countries.

To further cultural ties, the Indian Council for Cultural Relations (ICCR) and Italy's Ministry of Foreign Affairs and International Cooperation (MAECI) signed an Executive Programme for Cultural Cooperation in 2020.

India Italy Military Relations 

India and Italy also have an expanding defence partnership covering trade, joint exercises and co-development of military platforms.

Key areas of India Italy military relations include:

  • Sale of defence equipment and technologies by Italy to India. Major deals include 12 AW101 helicopters and terms for local production of 24 M-346 trainer aircraft.
  • Indian Navy and Italian Navy conduct joint maritime exercises like VARUNA and Indo-Italian Maritime Air Exercise.
  • Potential collaboration in the co-development of jet trainer aircraft, naval shipborne helicopters and missile defence systems.
  • Training exchanges and high-level defence dialogue through mechanisms like Foreign Office Consultations.
  • Cooperation on cyber security, maritime domain awareness, counterterrorism and UN peacekeeping.

The defence ties received a boost after the first India-Italy Virtual Summit in 2020. The two countries adopted a Joint Declaration on Defence Cooperation outlining their shared vision for closer strategic collaboration.

Conclusion

With their complementary economies and resources, India and Italy are well-positioned to unlock the immense potential in their bilateral economic ties in the coming decade through strategic cooperation in priority areas. Robust institutional mechanisms and political will on both sides will remain crucial to further elevate the India-Italy economic partnership.

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India Italy Relations FAQs

The India Italy Relations wwere established in 1948, a year after India gained independence from British rule. Italy opened its diplomatic mission in India in 1948, and India opened its embassy in Rome in 1950.

Some key bilateral agreements between the two countries are - Agreement on Science & Technology Cooperation (1976), Extradition Treaty (1993), MoU on Defense Cooperation (2007), Treaty on Transfer of Sentenced Persons (2008), MoU on Homeland Security Cooperation (2012).

Major export items from India to Italy include textiles, gems and jewellery, machinery, pharmaceuticals, vehicles and parts. Italy's exports to India include machinery, metals, minerals, plastics, chemicals, and transportation equipment.

According to Indian government data, cumulative FDI inflows from Italy to India for the period April 2000 – June 2021 amounted to around US$ 2.8 billion. Key sectors attracting Italian FDI include automotive, textiles, chemicals, infrastructure and food processing.

Major Italian companies operating in India include automaker Piaggio, electricity major ENEL, financial firms Generali and Intesa Sanpaolo, infrastructure company WeBuild, defence firm Leonardo, confectionery manufacturer Ferrero and energy firm ENI, among others. Over 600 Italian companies have a presence in India.
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