The Hindu Business Line : `Set up funds to support SMEs in India, Italy'

PRODI'S PRIORITY: The Prime Minister of Italy, Mr Romano Prodi, with the CII President, Mr R. Seshasayee, at a roundtable meeting with CEOs in Chennai on Saturday. - Bijoy Ghosh

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Chennai Feb. 10 There is need for collaboration between financial institutions in India and Italy to guide small and medium enterprises in both countries to expand operations, according to the Italian Prime Minister, Mr Romano Prodi.

"Financial institutions such as banks must hand hold SMEs in setting up shop in each other's countries," he said at a meeting organised by the Confederation of Indian Industry.

He cited the example of how banks in Romania and Italy had collaborated to help SMEs expand to each other's countries.

Further, he also said financial organisations in both countries could set up funds to help SMEs expand in other countries.

A consortium of seven large Italian banks recently created a € 300-million fund to support Italian SMEs in their expansion activities, he said.

Agreeing that Italian SMEs were ignorant about Indian businesses, Mr Prodi said there was need to bridge the gap between their knowledge of `old India' and the present `new India'.

"Our SMEs need to meet more Indian companies and get exposed to your way of operation and skills," he said.

At the same time, Indian companies too should look at Italy as a gateway to Europe. "We are giving a lot of priority to develop our sea ports," said Mr Prodi.

Italian ports are an entry point to the Mediterranean and North African markets too. "Indian companies should look at the European Union as one large market of half a billion people and not as fragmented countries," he said.

The CII, in a research document, has suggested setting up a joint Indo-Italian SME fund with a corpus of 1 million where 50 per cent of the funding would come from the two governments and the rest from international funding and private sector.

The CII President, Mr R. Seshasayee, told Business Line, the Italian delegation touring the country would look this proposal positively. "Italian SMEs are looking for joint ventures with Indian SMEs and need such a fund to back them. They should welcome this proposal," he said.

2007 will be promoted as the `Year of India' in Italy to facilitate trade and Mr Seshasayee said Indian industry too would reciprocate by a `Go Rome' campaign.

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