India and emerging markets as an opportunity for reviving Abruzzo exports

The latest ISTAT data on Italian regional exports, released on March 14, 2023, place Abruzzo in the third-to-last position in the ranking of Italian exports during the year 2022, with an annual growth of only 2.1% in terms of export value (an increase of only 182 million euros), compared to the +20% recorded at the national level and the +28.8% recorded in the southern and insular regions.

This particularly negative result for our region has been strongly influenced by the suffering of the automotive sector – a fundamental pillar of the Abruzzo economy – which recorded a decline of 29.4 percentage points in export value compared to 2021. This phenomenon is mainly related to contingent factors such as the unavailability of semiconductors and other raw materials, resulting in production shutdowns that have significantly affected the production results of the Sevel plant in Atessa, which has always been among the most successful in the Stellantis Group for the production of commercial vehicles.

The slight overall increase at the regional level is due to contributions from other sectors, including pharmaceutical, chemical-medicinal, and botanical articles (+41% in terms of export value compared to the previous year), rubber and plastic articles (+22.7%), metal products (+25.9%), food and beverages (+17.4%), and clothing (+39.9%).

In this context, it becomes essential for Abruzzo to strengthen its exports in order to recover lost ground compared to other regions in central-southern Italy, including through greater openness to emerging markets. Among these, India plays an increasingly central role, being one of the most dynamic economies in the world, which recorded an annual GDP growth of 7% in 2022, almost twice the global average of 3.6% and more than double that of the People's Republic of China (3%).

The strengthening of trade relations between Italy and India has been supported by the bilateral meeting between Prime Minister Giorgia Meloni and Indian Prime Minister Narendra Modi, which took place during the eighth edition of the Raisina Dialogue, an annual geopolitical conference hosted by the Indian Ministry of External Affairs and the Observer Research Foundation in New Delhi. This year, given the Indian presidency of the G20, the Raisina Dialogue has played an even more important role as a place of dialogue and meeting, considering the continuously evolving geopolitical situation of the world.

Visits and political relations at the highest level between India and Italy have multiplied and strengthened in recent years – also thanks to the work of the Italian Ambassador to India, H.E. Vincenzo De Luca – providing an adequate framework for the development of a solid and broad-based economic partnership, with a particular focus on five key sectors identified in the 2020-2024 Action Plan adopted during the summit between the two Prime Ministers at the end of 2020: green economy, agro-food industry, infrastructure, digital, and manufacturing/lifestyle.

Prime Minister Meloni announced Italy's participation in the Indo-Pacific Oceans Initiative (IPOI), becoming a strategic partner of India in this regional initiative aimed at establishing a cooperation mechanism based on seven pillars, including maritime security, maritime ecology, maritime resources, capacity building and resource sharing, disaster vulnerability reduction and management, scientific, technological and academic cooperation, trade, connectivity and maritime transport. This form of permanent presence in the Indo-Pacific is very important for strengthening and building new trade routes with India.

Data from the Economic Observatory of the Ministry of Foreign Affairs and International Cooperation, released on April 4, 2023, show that during 2022, the trade between Italy and India reached a record value of 14.877 billion euros: in particular, the value of Italian exports to India exceeded 4.8 billion euros, while imports of Indian products to Italy exceeded 10 billion euros.

India offers several export opportunities for Italian and Abruzzo companies, particularly in the machinery and equipment sectors (which account for 37.4% of total exports to India), chemicals (13.2% of Italian exports), and vehicles (5.1% of Italian exports). As for Indian exports to Italy, the predominant goods fall into the categories of metallurgy products, chemicals, and textile-clothing-leather accessories.

Italy has over 600 Italian companies permanently present in India, with an estimated employment of over 25,000 employees, mainly concentrated near the industrial hubs of Delhi – Gurgaon – Noida (the so-called Capital Belt) and the Maharashtra region (between Mumbai and Pune). To be noted, among the largest Italian groups present, are FCA, Magneti Marelli, Bonfiglioli, Ferrero, Piaggio, Luxottica, Ansaldo Energia, Saipem, Brembo, Marposs, as well as companies in the interior design, fashion and luxury fashion sectors such as Poltrona Frau, Zegna and Armani, and in the defense sector such as Beretta, Elettronica, Fincantieri.

In conclusion, India remains the country with the highest growth rate among the major emerging countries and with bright economic prospects, which can offer important economic opportunities for Italian and Abruzzo companies attentive to internationalization.

By: Carlo D'Andrea, Vice President of the European Union Chamber of Commerce in China and Managing Partner of D'Andrea & Partners Law Firm, with offices also in Shanghai and Pescara.