The main challenges Italian companies face while doing business in India include red tapism and a complex tax structure, according to Italian Trade Agency (ITA) President Michele Scannavini.
“(The challenges) are (dealing with) bureaucracy, complex taxation, permissions for doing business taking a long time, (and) procedures relating to starting companies (being) complex… Also, there are some barriers (including measures) that protect local production compared to foreign production.” Mr. Scannavini, who is in India with a 150-member delegation comprising representatives from 60 Italian companies, six industry associations, seven banks, and four universities and research centres, told The Hindu.
The ITA is the Italian government body promoting the internationalisation of Italian firms in line with their Economic Development Ministry’s strategies. Asked about corruption in India, he said, “Obviously, there is a concern (regarding that).”
However, he said Italy is keen to boost its exports and investments to India. Asked about the impact of the protracted negotiations on the proposed India-European Union Bilateral Trade and Investment Agreement (BTIA) as well as India unilaterally terminating the Bilateral Investment Treaties (BIT) with European Union member countries including Italy, Mr. Scannavini said, “We don’t see them as big negatives.”
“So far, we have not seen a big slowdown (in investments and exports from Italy to India). We are not seeing a decline or a paralysis of activity because of these. However, if we have a BIT and BTIA in place soon, they can definitely boost investment and trade,” he said.
India-Italy trade declined from $10 billion in 2011-12 to $8.28 billion in 2015-16, according to Indian government’s data. Italy’s exports to India fell from $5.1 billion in FY’12 to $4 billion in FY’16. Italy is the 13th largest source of Foreign Direct Investments (FDI) inflows into India with FDI worth $2.23 billion from April 2000 to December 2016 but accounted for a minuscule 0.69% of the total FDI inflows of $324.4 billion during that period.
