Use Italy as a port to enter European markets: CII to India Inc

In the backdrop of India’s improving trade ties with major economies of the world, ties with Italy is a story of mixed results. Bilateral trade at $4.37 billion in 2005-06 has been steadily rising but is a victim of high volatility.

In the backdrop of India’s improving trade ties with major economies of the world, ties with Italy is a story of mixed results. Bilateral trade at $4.37 billion in 2005-06 has been steadily rising but is a victim of high volatility.

A cumulative average growth rate of 25 per cent over the last five years may appear healthy on paper but an analysis done by Confederation of Indian Industries reveals that rate of growth has actually been on a decline since 2003-04 and as a result the percentage share of trade is less than 1 per cent of global trade on both sides.

The reason for such instability is composition of export articles from India to Italy that has taken place only in bits and parts. Of the top 10 such products, only coffee has registered relatively high growth accompanied with low fluctuations while as many as three products witnessed negative annual growth rate between 2000 and 2006.

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With an eye on achieving bilateral trade of $10 billion by 2010, the analysis has outlined a four point agenda on how the instability can be curtailed. Prominent among them is the suggestion to set up a joint Small and Medium Enterprises (SME) fund for promotion of joint ventures and augmenting

investment flows.

CII has recommended that the corpus can be of Euro 1 billion with 50 per cent of the fund coming from the two governments and the remaining from international funds and the private sector in both

countries.

CII has also recommended that India can use Italy as a port of entry to markets in Europe, the mediterranean and North Africa. “Basically India can set up large warehouses in Italy and use the ports for accessing markets like these. Italy’s geographical proximity to these markets can be utilised by exporters here,” said a CII official.