With protection pact, investments will flow: Italian minister Scalfarotto

Food processing and infra major draws for Italian investors, but ease of doing business is an issue

Leading a major trade delegation to India, Ivan Scalfarotto, Italian Deputy Minister of Economic Development, tells Subhayan Chakraborty that while the food processing and infrastructure sectors are major draws for Italian investors, ease of doing business remains an issue.

How will investments from Italy and Europe be affected with India cancelling its investment protection agreement with several European nations?

We think the matter of investment protection is important. While it will be part of talks between India and the EU, we believe it is very important for investors to be comfortable. With a sound investment protection pact in place, private investments will flow easier in both directions.

Apart from the automotive sector, where Italian companies have a significant presence in India, which are the areas Italian investors are looking at?

India is clearly one of the largest opportunities at the global level, especially for a country like ours. Italy is the second largest manufacturer in Europe and the sixth largest in the world. We are known the world over for food, fashion and design, but actually, we are very strong in technology. Around 20 per cent of our exports are based on machinery, almost 111 billion euros out of a total 417 billion euros last year. We are a country of transformation since we do not have much raw material. And India is very good at producing things. So there is an incredible match we can make between your products and our technology. Especially in the food processing industry. India is the world’s largest producer of milk, which is a perishable product. I understand only 10 per cent of perishable goods are transformed and if you look at fruits and vegetable, only around 2 per cent.

Another important sector is infrastructure. Our infrastructure companies work in more than 90 countries. Given India’s ambitious railway development plan, Italian firms specialising in high-speed rail can help.

Have Italian firms raised any issues regarding working in India?

We know that in the Doing Business rankings, India does not have a very high position, potentially because of bureaucratic hurdles. But we appreciate the government introducing the GST. We know in the past that moving goods across India itself was difficult.  

How do you think rising protectionism will affect trade between nations?

Protectionism should be fought. We appreciate India’s openness to global trade because the Italian government is also very much in favour of free trade. It creates immense opportunities for prosperity and development throughout the world. This needs to be managed. Probably in the past, it was left unmanaged, which led to some backlash. In a couple of weeks time, we will have the Joint Economic Commission in Rome. With the Indian minister of trade being present, we will have the opportunity to discuss some non-tariff barriers we are experiencing. In the frame of the EU-India free trade agreement, it will also help since we fully support it.

You are also accompanied by a significant number of Italian banks, which generally are not part of trade delegations. Why is that?

The Italian national development bank apart from credit rating agencies and companies providing equity to businesses setting up overseas are part of the trade delegation. This is because we are looking at offering a package of investments and financing options to the other country.