India Italy Economic and Commercial Relations

Executive Summary:

• India is Italy’s fourth largest trading partner in the EU
• Balance of trade has been in India’s favour since 1988.
• During 2002, India’s exports and imports stood at Euro 1586.7 million and Euro 1033.8, registering a fall of 4.86% and 0.06% respectively as compared to 2001. However, the balance of trade remains in India’s favour [(+) Euro 552.9 million]. {In this context, it is noteworthy that Italian global imports have fallen by 1.27%}. The thrust areas of India’s exports to Italy remain the same viz. textiles, including cotton and synthetic yarns and fabrics, knitwear items, readymade garments, leather and leather goods, granite and similar stones, organic and inorganic chemicals, bulk drugs, gems and jewellery, marine products, agricultural and horticultural products, auto components etc.
• During the period, January-October 2003, Indian exports to Italy were of the order of Euro 1440.3 million registering an increase of 6.59 % and Indian imports from Italy worth Euro 859.5 million sharing a decrease of 3.39%, over the corresponding period of 2002.
• Principal items of India’s exports to Italy: Textiles, readymade garments, leather and leather goods, granite and similar stones, bulk drugs, basic chemicals, gems and jewellery, marine products, engineering goods, auto parts etc.
• Principal items of India’s imports from Italy: Machinery for precision tools, basic and other chemicals, textile and granite machinery, general machinery, precision tools, leather and goods, fabrics, auto vehicle parts, base metals and tubes, measuring instruments etc.
• Italy accounts for about 2.04% of the total investment approvals from August 1991 to December 2002, with FDI approvals of US$1.29 billion and a cumulative Inflow of US$0.41 billion. Top sectors attracting FDI from Italy are Transportation Industry (57.28%), Food Processing Industries (9.13%), Metallurgical Industries (8.01%), Electrical Equipment (including computer software (4.48%) and Textiles (4.25%).
• Future Prospects for investment and trade are encouraging, as India is increasingly being seen as an important economic partner in Asia, both in terms of trade and investment.

Italy is India’s fourth largest trading partner in the EU. Italy is the 12^th largest foreign investor in India. The European countries ahead of Italy in this respect are UK, Germany and France.

Indo-Italian trade had been steadily developing in recent years. However, there was a fall in 2002 as compared to 2001. The balance of trade has been in India’s favour. Bilateral trade statistics for the past few years are given below:

Indo- Italian Trade

Italy’s Global Trade - India’s share

India’s Exports to Italy

Indian exports of Euro 1586.7 million in 2002 represent only 0.6% of Italy’s global imports of Euro 256.8 billion. India’s exports to Italy in 2002 have shown a decrease of 4.86% over 2001. However, in January-Oct 2003, Indian exports to Italy registered an increase of 6.59% over the corresponding period of 2002.

Major items of India’s exports to Italy during 2001 and 2002

Principal items of India’s exports to Italy: Textiles, readymade garments, leather and leather goods, granite and similar stones, bulk drugs, basic chemicals, gems and jewellery, marine products, engineering goods, auto parts etc.

India’s Imports from Italy

Indian imports from Italy of Euro 1033.8 million represent only 0.4% of Italy’s global exports of Euro 265.3 billion in 2002. Indian imports from Italy in 2002 have shown a decrease of 0.06% terms over 2001.

Major items of India’s imports from Italy during 2001 and 2002

Principal items of India’s imports from Italy: Machinery for precision tools, basic and other chemicals, textile and granite machinery, general machinery, precision tools, leather and goods, fabrics, auto vehicle parts, base metals and tubes, measuring instruments etc.

Indian exports during the period Jan-December 2002 were of the order of € 1586.7 million as against corresponding exports of € 1667.8 million during the same period of 2001. Total Indian exports to Italy have decreased by 4.86% during the period. The exports of some major items such as knitwear articles, readymade garments, leather garments, Leather goods, basic chemical products, Iron and steel alloys, Cutlery, Auto vehicles, auto components showed an increase of 3.70%, 4.55%, 0.60%, 22.75%, 2.46%, 55.91%, 15.56%, 37.5% and 12.78% respectively over the corresponding 2001 figures in Euro terms. Some other major items such as cotton and synthetic yarns, cotton and synthetic fabrics, raw leather/hides, footwear, granite and similar stones, showed a decrease in value in Euro terms by 4.23%, 28.8%, 21.53%, 14.18% and, 9.63%, 11.22% respectively over corresponding figure of 2001. The fall in India’s exports to Italy in certain items may be understood in the context of a general reduction in Italy’s overall imports. (The total Italian imports in 2002 have come down to Euro 256887 million in 2002 against Euro 260179 million(2001) showing a decrease of 1.27%).

Trade in Marine Products

There have been frequent cases of rejection of seafood consignments from India at the Italian ports, for reasons of bacterial/chemical contamination. With regard to the quality checks of seafood processing units in India, Export Inspection Council of India, the competent authority, grants approval to those marine products processing units who comply with the requirements of Government of India Notification dated 21.8.1995, which are based on the requirements of EC Directive No. 91/493/EEC dated 22^nd July, 1991. In this background, the Indian side has assessed the following to be the main points of concern: (i) Many rejections are due to the reported presence of bacterial inhibitors, and confirmatory tests not conducted to identify the specific bacterial inhibitor. As certain bacterial inhibitors are permitted and not banned, it is necessary to identify and determine the same as also the quantity in which these are present before a consignment is rejected. (ii) Italy has not specifically laid down microbiological standards for marine products and is following common norms. However, often the rejections are with regard to microorganisms not covered in the EC norms. (iii) The method of sampling and test followed by Italy appears to be different to what has been laid down by EC. (iv) There is no system of re-testing or an appeal mechanism to settle such cases in which contamination is detected.

This problem is being taken up at the inter-governmental level. A Memorandum of Understanding (MoU) between India and Italy on marine products is also under active consideration, aimed at facilitate smooth functioning of trade in seafood between the two countries.

Trade Centres

The Commercial Wing in the Embassy, with a separate commercial budget, serves as India’s trade and investment promotional body in Italy. Italy has Trade Commissions (offshore offices of the state-funded Italian Institute of Foreign Trade) in New Delhi, Mumbai and Chennai. The Lombardy Region of Italy has opened a Trade Office in Mumbai recently.

Trade Exhibitions:

Both India and Italy participate in each other’s trade fairs in items of bilateral interest. Some in Italy, particularly in fashion textiles, leather goods, engineering and machinery, gems and jewellery, are highly renowned internationally, in which the Indian companies would wish to participate on a larger scale. However, the cost of participation and availability of space are important factors.

SMES:

Small and Medium enterprises constitute the backbone of Italy’s industry. Italy therefore has high-level expertise, experience and technologies in the SME sector. An Indo-Italian MoU on for development of SMEs in India was signed in 2000. The Mission has sought to activate this aspect of bilateral relationship with a view to gainfully utilize the Italian assistance and to expose Indian SMEs to the Italian SME sector.

Italian Assistance:

Italian concessional assistance is being provided to India since 1981. With the signing of an MoU in 1996, Italy committed a soft loan of 100 billion Italian Lire (Euro 50 million approx). 50 billion lire of the above had been allocated for establishing an open credit line for financing supplies of capital goods and related technical assistance for the development of the Indian SMEs. GOI has designated NSIC for this credit Line. The remaining 50 billion is to be used for financing water supplies and solid waste management project in West Bengal. (The main target sectors are poverty alleviation, health and training).

Aid Projects:

• The projects that have been carried out are the Spinal Injuries Centre in New Delhi; a vocational technical training centre in New Delhi; and a Medical Centre for teenagers in Dharamsala.
• The projects underway include a Centre in Calcutta for operators of audio-visual systems for educational purposes for rural populations, and a programme of assistance to develop SMEs in India.
• The projects at the starting stage are: A children welfare project in Karnataka; an intervention of integrated health development and of mother and child health in the states of Orissa, Bihar and West Bengal.; and a water supply and waste management programme in 14 municipalities of West Bengal.
• As per the planning report for 2002-2004, the following 2 initiatives have been envisaged in health and training sectors: (i) Fight against urban poverty in collaboration with the WB in Mumbai and Andhra Pradesh., (ii) Programme of support to the internationalisation of Indian SMEs through UNIDO.

Banking Links:

Banking relations between India and Italy are reliable and problem-free. SBI has a representative office in Milan. Four Italian banks have representations in India viz Unicredito, BNL, SaoPaolo IMI and Banca Intesa.

Transportation:

The Indo-Italian Air Services Agreement was signed in 1959. In April 1999, Air-India flights to Italy had been suspended for fleet constraints. Secretary (Civil Aviation) visited Rome in February 2003 for air services talks, including exploring any feasibility to again bring Italy on Air-India’s circuit. It was decided that over and above the existing entitlements of 7 weekly frequencies, either side shall be allowed to operate up to 7 additional frequencies per week in each direction only on the route Rome-Delhi-Rome sector. Presently Alitalia is operation daily flights on Milan-Mumbai-Milan sector. There are no direct links between Rome and New Delhi. For maritime commercial cargo, major Italian ports (Naples, Bari, Ancona, Livorno, Genoa and Trieste) have links with major Indian ports.

Regional Level Initiatives of Cooperation:

The President of the Italian Region of Lombardy, Mr Roberto Formigoni, visited India from April 14 to 18, 2002. He was accompanied by officials of the Lombardy Region; businessmen and industrialists representing diverse areas of Lombardy’s economy; and a group of journalists. He visited Delhi, Kolkata and Bangalore. He met the Indian Union Ministers of Commerce & Industry, Information Technology, Water Resources and Disinvestments. PM received him for a courtesy call. Besides, he met India’s National Security Adviser and Principal Secretary to the PM; and the Leader of Opposition in the Parliament. With a view to forge closer trade and economic ties between the Lombardy Region and the Indian states of Delhi, Karnataka and West Bengal, he held discussions with the Chief Ministers of those states. President Formigoni also interacted with a select group of Chambers of Trade and Industry, as also some internationally renowned enterprises.

Possible areas of India’s cooperation with the Lombardy region include Information Technology; telecommunications; fashion; textiles; garments; food-processing; agro-industry; leather and leather goods; gems and jewellery; engineering; waste processing; water management; power; technical education; small and medium enterprises; banking; process of privatisation of public enterprises etc. Particular emphasis was laid on India’s strengths and achievements in the IT sector, and the ways and means to cooperate with the Lombardy Region.

Joint Commission for Economic Cooperation

The Indo-Italian Joint Commission for Trade and Economic Cooperation was set up through an exchange of letters in March 1976. Its precursor had been set up under the Indo-Italian Trade Agreement of 1959 that expired in September 1975. As per the agreement, the Joint Commission is expected to meet annually alternately in New Delhi and Rome. The first session took place at Rome in December 1976. So far 15 sessions have been held, the last being in Rome in February 2002. It is co-chaired by India’s Commerce & Industry Minister and Italy’s Minister for Productive Activities. Minister level bilateral interaction at these meetings provides high focus to the various issues pertaining to trade and economic cooperation, besides maintaining bilateral political contacts. The next (16^th) meeting is being scheduled to take place in India later in 2003. Precise dates are being worked out.

Joint Working Groups under the Joint Commission

Tourism:

At the 12^th session of the Joint Commission (December 1996), it was decided to set up a JWG on Tourism. It is co-chaired by Joint Secretary, Ministry of Tourism (Indian side) and the Head of Planning, Department of Tourism in the Ministry of Productive Activities (Italian side). Its first and the only meeting so far was held in New Delhi in November 2001. The two sides examined the future prospects for bilateral cooperation in this field, particularly "the possibility of fine-tuning the mutual offer of tourist packages to the heritage sites, culture and way of life of the Indian and Italian people". There has been little progress in this field in concrete terms. {A bilateral Agreement for cooperation in tourism was signed in June 2000 during the PM’s visit to Italy. Government of India Tourist Office in Milan is active in promoting tourism to India. Expanding air links and seat-capacity limitations have been considered necessary to boost tourism in Italy. In this connection, Indo-Italian Civil Aviation Talks were held in Rome on February 3-4, 2003, to discuss air traffic and air services agreements. An MOU was signed between the countries on 4.2.2003 regarding the air services.}

Food Processing:

At the 12^th session of the Joint Commission (December 1996), it was decided to set up a JWG for cooperation in the field of Food Processing. (Italy possesses high-level expertise and technology in this field). It is co-chaired by Joint Secretary, Ministry of Food Processing Industries and Vice President of Italy’s Federation of Italian Food Processing Industry (Federalimentare). Its first meeting was held in Rome in December 1998, when an Agreement on cooperation in the field of food processing was also signed. Its 2^nd meeting took place in New Delhi in October 2000. The discussions at these meetings focussed on promotion of investments and technological collaboration in the sector. Dates for the 3^rd meeting of the JWG are yet to be finalised.

Information Technology

At the 13^th session of the Joint Economic Committee in December 1998, it was decided to set up a JWG on Information Technology. It was realized that considerable potential existed in this field that required focused attention. Its first meeting was held on 26^th April 2001, co-chaired by Secretary, Ministry of Information Technology, Under Secretary in the Italian Ministry of Trade and Industry. During this interaction, a Memorandum of Understanding for Cooperation in IT sector was also signed, identifying the following areas for cooperation:

1. Software Development
2. IT Enabled Services
3. Tele-Medicine
4. Cyber Education
5. Electronic Commerce
6. Electronic Government
7. Information Security and Cyber Crime
8. Human Resource Development
9. Research, Design and Development
10. Exploring third country markets
11. Wireless Application Protocol and 3G for promotion of internet, e-commerce and m-Commerce
12. Data network technology for promotion of internet, e-commerce and m-Commerce
13. Applications for networked appliances

Bilateral Investment Protection Agreement (BIPA)

An Agreement between the Governments of India and Italy for the promotion and protection of investment was signed in Rome by Mr. Pranab Mukherjee, External Affairs Minister and Mrs. Susanna Agnelli, Minister of Foreign Affairs of Italy on 23^rd November 1995. The Agreement is aimed at creating conditions for fostering greater investments by nationals and companies of the two countries, reciprocal protection of such investments and stimulation of individual business initiatives in the two countries. Following ratification by both sides, the Agreement came into force w.e.f. 26.3.98.

Avoidance of Double Taxation Agreement (DTAA)

The Government of India and the Government of the Italian Republic signed the Double Taxation Avoidance Agreement in 1985. It was bilaterally agreed to amend it and a revised text was signed during the visit of the Italian Minister of Foreign Trade to New Delhi on 19.2.1993. The Instruments of Ratification were exchanged in Rome in November 1995. As per the Convention, negotiations between the Indian and Italian delegations were held in Rome from 9-11 July 2002 to conclude an amending Protocol to the current Convention between both the Governments. The Italian delegation from the Ministry of Economy and Finance would be visiting New Delhi during October 2003 to have further negotiations to conclude the Double Taxation Avoidance Agreement.

Institutionalised Business Level Cooperation:

The Indo-Italian Joint Business Council (JBC) is coordinated by India’s FICCI and Italy’s Confindustria. Its last meeting in New Delhi in October 2000, coinciding with the 14^th session of the Indo-Italian Joint Commission. The joint Inaugural Session was addressed by Commerce and Industry Minister (Mr Murasoli Maran) and Italy’s Minister of Industry and Foreign Trade, Mr Enrico Letta. The Indo-Italian Chamber of Commerce and Industry (Mumbai) also participated. A FICCI business delegation accompanied the PM on his visit to Italy in June 2000, when FICCI and Confindustria jointly organised an Interactive Meeting "India-Italy Business Cooperation - New Frontiers" with a Special Address by the PM and a Valedictory Address by then Finance Minister MR Yashwant Sinha. FICCI signed an MoU for cooperation with Italy’s Unionecamere, which is lying dormant. The next meeting of the JBC is expected to take place in India later in 2003, in parallel with the 16^th session of the bilateral Joint Commission. Dates for the JC meeting are still being worked out.

Italian Assistance:

Italian concessional assistance is being provided to India since 1981. With the signing of an MoU in 1996, Italy committed a soft loan of 100 billion Italian Lire (Euro 50 million approx). 50 billion lire of the above had been allocated for establishing an open credit line for financing supplies of capital goods and related technical assistance for the development of the Indian SMEs. GOI has designated NSIC for this credit Line. The remaining 50 billion is to be used for financing water supplies and solid waste management project in West Bengal. (The main target sectors are poverty alleviation, health and training).

Aid Projects:

• The projects that have been carried out are the Spinal Injuries Centre in New Delhi; a vocational technical training centre in New Delhi; and a Medical Centre for teenagers in Dharamsala.
• The projects underway include a Centre in Calcutta for operators of audio-visual systems for educational purposes for rural populations, and a programme of assistance to develop SMEs in India.
• The projects at the starting stage are: A children welfare project in Karnataka; an intervention of integrated health development and of mother and child health in the states of Orissa, Bihar and West Bengal.; and a water supply and waste management programme in 14 municipalities of West Bengal.
• As per the planning report for 2002-2004, the following 2 initiatives have been envisaged in health and training sectors: (i) Fight against urban poverty in collaboration with the WB in Mumbai and Andhra Pradesh., (ii) Programme of support to the internationalisation of Indian SMEs through UNIDO.

Banking Links:

Banking relations between India and Italy are reliable and problem-free. SBI has a representative office in Milan. Four Italian banks have representations in India viz Unicredito, BNL, SaoPaolo IMI and Banca Intesa.

Transportation:

The Indo-Italian Air Services Agreement was signed in 1959. In April 1999, Air-India flights to Italy had been suspended for fleet constraints. Secretary (Civil Aviation) visited Rome in February 2003 for air services talks, including exploring any feasibility to again bring Italy on Air-India’s circuit. It was decided that over and above the existing entitlements of 7 weekly frequencies, either side shall be allowed to operate up to 7 additional frequencies per week in each direction only on the route Rome-Delhi-Rome sector. Presently Alitalia is operation daily flights on Milan-Mumbai-Milan sector. There are no direct links between Rome and New Delhi. For maritime commercial cargo, major Italian ports (Naples, Bari, Ancona, Livorno, Genoa and Trieste) have links with major Indian ports.

Regional Level Initiatives of Cooperation

The President of the Italian Region of Lombardy, Mr Roberto Formigoni, visited India from April 14 to 18, 2002. He was accompanied by officials of the Lombardy Region; businessmen and industrialists representing diverse areas of Lombardy’s economy; and a group of journalists. He visited Delhi, Kolkata and Bangalore. He met the Indian Union Ministers of Commerce & Industry, Information Technology, Water Resources and Disinvestments. PM received him for a courtesy call. Besides, he met India’s National Security Adviser and Principal Secretary to the PM; and the Leader of Opposition in the Parliament. With a view to forge closer trade and economic ties between the Lombardy Region and the Indian states of Delhi, Karnataka and West Bengal, he held discussions with the Chief Ministers of those states. President Formigoni also interacted with a select group of Chambers of Trade and Industry, as also some internationally renowned enterprises.

Possible areas of India’s cooperation with the Lombardy region include Information Technology; telecommunications; fashion; textiles; garments; food-processing; agro-industry; leather and leather goods; gems and jewellery; engineering; waste processing; water management; power; technical education; small and medium enterprises; banking; process of privatisation of public enterprises etc. Particular emphasis was laid on India’s strengths and achievements in the IT sector, and the ways and means to cooperate with the Lombardy Region.

Visit of Commerce and Industry Minister to Italy in February 2002

Minister of Commerce & Industry visited Italy from February 9-13, 2002 to attend the XV session of the Indo-Italian Joint Economic Cooperation (JEC) Meeting and the "Destination India" investment promotion seminars held in Rome and Milan. CIM was accompanied by Secretary (DIPP) and Additional Secretary, Department of Commerce, and a 22 member business delegation from FICCI. About 150 Italian companies participated in the Rome "Destination India" investment promotion seminar organised by FICCI in collaboration with the Confederation of Italian Industries (Confindustria), and Italian Institute for Foreign Trade (ICE) on 11^th February. The Italian Deputy Minister for Productive Activities, Dr. Adolfo Urso attended the seminar. The seminar held in Milan on 13^th February was organised in collaboration with ASSOLOMBARDA, with the participation of about 60 Italian companies. Four MOUs on cooperation in the leather sector were signed.

During the visit, CIM held detailed discussions with the Italian Minister for Productive Activities, Prof. Antonio Marzano. He also met the President of the Lombardy Region, Mr. Roberto Formigoni (in Milan). CIM briefed his Italian counterpart about the present status of economic reforms in India and the significant investment opportunities available for Italian firms. The problems faced by the Indian marine product exporters as well as the issue of visas for IT professionals of India were also mentioned by CIM. The Italian Minister appreciated the progress achieved by India on the economic front in recent years and assured all possible help and cooperation in removing bottlenecks in bilateral trade between the two countries. While assuring that the visa problems of IT professionals of India would be carefully considered and taken up at the level of the competent authorities for a favourable solution, he also referred to the problems of the Italian exporters regarding export of raw marbles and jewellery items – which are currently under the restrictive list by India in terms of Article 20 and 21 of the WTO agreement on GATT.

"Destination India" seminars:

A 22-member FICCI business delegation also accompanied the Commerce and Industry Minister. The "Destination India" investment promotion seminar held in Rome on February 11, 2003 was coordinated by FICCI in collaboration with the Confederation of Italian Industry (Confindustria), and the Italian Institute for Foreign Trade (ICE). The Italian Deputy Minister for Productive Activities, Dr. Adolfo Urso attended the seminar. About 150 Italian companies participated. The seminar in Milan on 13^th February was organised in collaboration with ASSOLOMBARDA, with the participation of about 60 Italian companies. While in Milan, he also met the President of the Lombardy Region, Mr. Roberto Formigoni. The Mission has proposed to the Ministry of Commerce and Industry that similar "Destination India" seminars could again be considered during the 17^th session of the Joint Commission in India.

Visit of Hon'ble Minister for Parliamentary Affairs, Communications and Information Technology, Government of India, Mr. Pramod Mahajan, to Italy:

At the invitation of the Minister for Innovation and Technologies of Italy, Mr. Lucio Stanca, the Minister for Parliamentary Affairs, Communications and Information Technology, Government of India, Mr. Pramod Mahajan, visited Italy from October 24-28, 2002. Accompanied by officials and an IT industry delegation, the Minister, along with Mr. Lucio Stanca, attended the inauguration of the prestigious event on Information and Communications Technology - "SMAU 2002" - on 24th October in Milan. A special focus was given to India at SMAU 2002. In the framework of SMAU 2002, Minister Mr Mahajan addressed a conference "India-Italy: The Business Opportunities", briefing on the need to jointly explore prospects for further mutually beneficial cooperation in the ICT sector.

At the official talks between Minister Mahajan and Minister Stanca, the two sides agreed that India would share its expertise and experience in E-Voting (Electronic Voting Machines) and Italy would provide its technological expertise in its ongoing initiatives of providing E-Identity Cards (Smart Cards) to its citizens. Both Ministers also agreed to share the various technologies being employed by the two countries towards developing E-Governance. It was also decided that the next session of the inter-governmental Joint Working Group on IT would take place on early mutually convenient dates in India. The Indian side is seeking the response of Government of Italy on the modalities as to how the two countries could work together for the actual realization of the mutually identified action points. The dates for the next session of the JWG are yet to be decided.

While in Rome, Minister Mr. Mahajan met Mr. Maurizio Gasparri, the Italian Minister for Communications on October 28, 2002. The two Ministers discussed the growth of communication technology and the potential for bilateral cooperation. Both the Ministers signed a Memorandum of Understanding (MOU) on Cooperation in the field of Telecommunications. The MOU provides for scientific and technical interface, exchange of information on policies and regulations, improvements in technology and implementation, discussions on new technologies and the development of international legislation related to this field. Other areas covered by the MOU are information exchanges in the field of spectral management and standardisation, investments in the telecommunication sector, promotion of joint ventures, including in Third Countries and the fostering of relations between business and regulatory agencies. The MOU indicates that both sides will work towards evolving a Mutual Recognition Agreement for telecommunications products certification by testing agencies in both countries. A Joint Working Group for facilitating programmes on the above issues is to be set up under the MOU. The MOU is for an initial period of three years and aims at mutual benefit in this expanding sector where new technology plays an important role.

Recent Business Level Visits

A FICCI-led business delegation accompanied Minister of Commerce & Industry to Italy [February 2002]. Besides, a seafood delegation (September 2002), a NASSCOM-coordinated IT delegation [October 2002], a textiles delegation from PEDEXCIL (January 2003), an Ayurveda industrial group (February 2003) has also visited Italy. In addition, there have been visits from IIM (Calcutta) [September 2002] and NABARD [January 2003] to study the Italian market. From the Italian side, President of Lombardy was accompanied by a large business delegation to India [April 2002].

Cooperation in E-Voting

"Bharat Electronics Limited" (BEL) has studied, on its own, certain requirements that Italy might need to consider while introducing electronic voting system in Italy on a major scale. This study has been submitted to the Directorate of Elections in the Italian Ministry of Interior. BEL has proposed to have discussions with the concerned Italian authorities to understand the requirements of Italy in this field in more precise terms, and to conduct any further model-studies, for which it is even prepared to send a team of experts to Italy. Italy is presently following the manual system of voting. Italy has in the past used E-voting in a limited way for referendum, provincial/municipality level elections at places like Avellino, Cremona and Campobasso. However, such trials were experimental in nature and had no legal validity. Italy would perhaps prefer to move on from the manual to the electronic system of the voting in a rather gradual manner with some sort of coordination at the EU level.

There are proposals for the Italian Ministers of Innovation & Technologies, and Communications to visit India. Dates are yet to be worked out.

Power:

Secretary (Power), accompanied by a delegation, visited Italy in January 2002 and held detailed discussions at the Department of Power and Mineral Resources, Italian Ministry of Productive Activities. The thrust was on the technologies being applied in Italy in the field of electrical energy. He suggested that a Joint Working Group on Power could be set up under the Indo-Italian Joint Commission for Economic Cooperation. It is proposed to be co-chaired by Secretary (Power) on the Indian side. In the Indian proposal, the suggested Terms of Reference are:

(i)  Sharing of experience on matters related to power reforms, restructuring and regulation.

(ii) Exchange of views on how to reduce transmission and distribution losses, conduct of      energy audits and metering.

(iii) Technical cooperation in the areas of cross border exchange of power, pricing, payment,       security etc.

(iv) Exchange of experience relating to operation of the Independent System Operator and       load dispatch centers.

(v)  Cooperation between experienced institutions like Central Power Research       Institute  (CPRI) and Centro Elettrotecnico Sperimentale italiano of Italy (CESI) in Italy in       the R&D sector.

(vi) Promotion of commercial and business opportunities in the power sector between India       and Italy.

The proposal is under consideration by the Italian side.

FDI approvals & inflows:

• Italy accounts for about 2.04% (with FDI approvals of US$1.29 billion) of the total investment approvals from January 1991 to December 2002..
• Cumulative Inflow from Italy during this period is US$ 0.41 billion (2.20%).

Top sectors attracted FDI approvals:

• Top sectors attracting FDI from Italy are Transportation Industry (57.05%), Food Processing Industries (9.13%), Metallurgical Industries (8.01%), Electrical Equipment (including computer software and electronics (4.47%) and Textiles (4.53%).

Technical collaborations:

• Italy has been granted 463 technical collaborations (6.20% of the total) since 1991.
• The highest technical collaborations have been in the Transportation Industry (69 nos.) followed by Chemicals (other than Fertilizer) (66 nos.), Electrical Equipment (including computer software and electronics) (64 nos.), Drugs and Pharmaceuticals (50 nos.) and Industrial Machinery (50 nos.).

Investing Companies:

• The major Italian companies which have invested in India are Fiat Auto S.P.A., Heinz Italia S.P.A., FIDIA S.P.A., Italcementi S.P.A., Necchi Compressori S.P.A., Perfetti S.P.A., Fata Hunter Engineering, etc..

  An analysis of the foreign collaborations and foreign direct investment (FDI) approved by the Government after the announcement of new industrial policy since August, 1991 shows that FC approvals and investment from Italy have risen substantially. From January 1991 to December 2002, Government has approved 23,462 foreign collaboration (technical & financial) proposals with a corresponding foreign direct investment of Rs.2, 848.12 (US$76.61) billion. Out of this, the total numbers of approvals with Italy have been of the order of 918 (4.14% of the total approvals) with an equity participation of Rs.47.79 (US$1.29) billion (2.06% of the total investment), Italian companies rank 12^th in list of countries in terms of cumulative FDI approved from January 1991 to December 2002.

Foreign Direct Investment Approved