The Hindu Business Line : € 300-m `Go India Fund' to assist Italian SMBs

STRENGTHENING TIES: The Italian Minister of International Trade and European Affairs, Ms Emma Bonino, at the opening ceremony of `Indo-Italian Synergy: Destination West Bengal' in Kolkata on Monday. — A. Roy Chowdhury

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Kolkata Feb. 12 Italy has created a € 300-million "Go India Fund" with a view to assisting Italian small and medium businesses (SMBs) to set up operations in India. The assistance could be in the form of fiscal assistance or even money that would fund feasibility studies for proposed projects, according to Ms Emma Bonino, Italy's Minister for International Trade and European Affairs.

A further amount of € 10 million has been set aside for trade promotion in India. With the initiatives being taken, it is hoped that Indo-Italian bilateral trade will go up from € 3.8 billion at present to € 10 billion within the next three years.

Ms Bonino, who is on a visit to the city with a 400-member business delegation, told newspersons that the domestic market in Italy was "saturated" and it would be imperative for Italian businesses to go global if they were to grow further. While earlier, Indian SMBs were viewed as "threat" by their Italian counterparts, the latter now see in the Indian SMB sector "opportunities for partnerships and growth." As such, India has been chosen as a "focus country" for 2007. This follows the Indo-Italian Joint Commission meeting in November last year that was led by Mr Kamal Nath, Union Minister for Commerce.

Major contributor

Ms Bonino said SMBs comprise 90 per cent of the productive sector in Italy and account for 73 per cent of the country's gross national product. While the perception of Italy's expertise has largely been confined to sectors such as fashion and jewellery designing, leather and wines, few are aware that exports of machine tools account for a majority of Italy's export earnings.

According to her, besides machine tools, Italian SMBs would be keen to offer their expertise to Indian companies in areas such as wood work machines, packaging machines, machines and expertise for the leather sector, technology for processing and packaging of food products, cold chains, infrastructure, biotechnology, etc.

Film shooting

On its part, Italy was keen to attract the Indian film industry to shoot on locales there. The Indian film industry has been asked to prepare and submit to the Italian authorities a "comparative package of incentives" that are offered to it by other states in Europe. "If it can be Switzerland, why not Italy," she said, and added that India had been chosen as the "Guest of Honour" country at the Rome Film Festival that is slated to be held in November 2007. Italian cinema would also be showcased at the Frames Exhibition in Mumbai next month.

Ms Bonino said there were several factors hindering the growth in bilateral trade between India and Italy. These included lack of market access and exposure to distribution channels and inadequate air connectivity. "Some sectors such as banking have not liberalised as desired, there is common red tape, tariff in India needs to be lowered. We cannot increase economic relations without more flights and our SMBs have to adopt a consortium approach to access the Indian market. Distribution in India, too, is an issue for Italian SMBs even as our banks have lately gone international," she said. While six Italian banks already have a presence in India, two more have firmed up plans to set footprint here, she said.

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