India-Italy strategic partnership

Opening a new chapter in defense and aerospace

Independent India’s diplomatic connection with Italy goes back to 1947, and the two countries, in general, have enjoyed a cordial relationship ever since. There has been a regular exchange of visits at political and official levels between both countries. From the Indian side, at the Head of State/Government level, visits date back to 1953 & 1955 when Prime Minister Jawaharlal Nehru visited Italy, Prime Minister Smt. Indira Gandhi in November 1981; President Dr. Shanker Dayal Sharma in October 1996; Prime Minister Shri H.D. Deve Gowda in November 1996; Prime Minister Shri I.K. Gujral in September 1997; Prime Minister Shri A.B. Vajpayee in June 2000; and Prime Minister Dr. Manmohan Singh in July 2009.

From the Italian side, the first visit at the Head of State/Government level occurred in 1988 when Prime Minister Mr. Giovanni Goria visited India. This was followed by President Dr.Oscar Luigi Scalfaro in Feb 1995; Prime Minister Prof. Romano Prodi in Jan 1998; President Mr. Carlo Azeglio Ciampi in Feb 2005; and Prime Minister Mr. Romano Prodi in Feb 2007. Both countries regularly hold an institutionalized Senior Officials Dialogue (Foreign Office Consultations).

Barring a few years of tensions due to the case of the two Italian marines accused of killing two fishermen off the coast of Kerala, the two countries have put that aside and revived normal relations in 2017.

Recently Indian Prime Minister Mr. Narendra Modi hosted his Italian counterpart Ms. Georgia Meloni in New Delhi. Both leaders agreed to elevate the current bilateral relations to a “strategic partnership.” “This year, India and Italy are also celebrating the 75th anniversary of our bilateral relations. On this occasion, we have decided to elevate the India-Italy partnership to a strategic partnership,” says Modi, with the Italian prime minister on the sidelines of the 8th Raisina dialogue.

Another significant outcome of the meeting was a landmark MOU and partnership agreement on defense manufacturing, joint production, innovation, and design, opening the door for defense equipment manufacturers from both countries to come together and participate. New Delhi and Rome have worked on it for the last two years after India’s Modi Government lifted a seven-year ban on Italy’s Leonardo SpA.

(Source -The Economic Times)

India-Italian Bilateral Relations

Official statistics reveal that Italy is among India’s top 5 trading partners from the EU. The balance of trade has been in India’s favor since the eighties. The bilateral trade between the two nations was valued at US$ 9.1 billion in April-November 2022. Italy ranks 17th in terms of FDI in India from April 2000 to September 2022, with an FDI inflow of US$ 3.2 billion in the same period.

The main items of Indian exports to Italy are ready-made garments, leather, iron ore, motor vehicles, textiles, chemicals, gems & jewelry. The main import items from Italy are general and special-purpose machinery, machine tools, metallurgical products, and engineering items. Around 140 large Italian companies are active in India, Europe’s second-biggest industrial power and euro zone’s third-largest economy; Italy counts India among its major trading partners from Indo-Pacific. (Source India Italy Trade)

Indian Prime Minister Mr. Narendra Modi paid his first state visit to Italy to attend the G20 Summit at the invitation of PM Draghi. On the sidelines of the Summit, both leaders held a bilateral meeting and exchanged views on bilateral relations and other regional issues of mutual interest. The leaders issued a Joint Statement announcing a Strategic Partnership on Energy Transition, and a Statement of Intent on Textile cooperation was signed. However, the recently elevated Indo-Italian strategic partnership also underlines the significance of defense cooperation as a critical pillar in our relationship. And the Memorandum of Understanding was signed on defense cooperation focusing on three areas:

• Strong collaboration in manufacturing, co-production, co-design, and co-innovation.
• expansion and deepening of military exercises to all levels in the armed forces.’
• maritime cooperation

(Source – Outlook )

Strengthening Defense ties indicates a more prominent role in Indo Pacific region.

 Just a few days before Prime Minister Meloni’s state visit to Delhi, Italy sends its state-of-the-art “Morosini offshore patrol vessel” — showing its concern for the region’s strategic importance. The Indian government’s recent decision to lift the seven years old ban on leading Italian aerospace firm Leonardo and bring it back into the Indian defense market and the contribution of shipbuilding company Fincantieri to the construction of India’s first indigenous aircraft carrier INS Vikrant bodes well for strong India-Italy defense and security ties. Besides, both navies collaborate on an anti-piracy drive to secure the regional sea passage. Rome’s sudden naval mission is part of a planned interaction and explores a more profound understanding with the Indian Navy.

Italy joined the Indian Ocean Rim Association (IORA) as a Dialogue Partner. It shows Italy’s keenness to invest in the blue economy and foster stronger cooperation with India in the Mediterranean and the Indian Ocean.

(Source Decode 39)

Highlights of India’s Defense Manufacturing Industry

 As the second largest and fourth mightiest military power, India’s defense sector is strategically important to the Indian government. Demand for defense equipment in India has been growing due to the ongoing border disputes with Pakistan and China over Kashmir and Arunachal Pradesh in the northeast region.

The core segments of our defense include military fixed wing, naval vessels and surface combatants, air force, missiles, and missile defense systems.

As a result, there is also a high demand for specialized military equipment like rotorcraft, submarines, artillery, tactical communications, drones, electronic warfare, and military land vehicles.

The Indian defense manufacturing industry plays a catalytic role in the national economy. With the changing landscape of regional geopolitics and rising national security concerns, the demand for state-of-the-art defense equipment and military hardware is steadily increasing for modernizing the armed forces.

Prime Minister Modi’s government is keen on reducing dependence on external procurement, which is also a focus of our national government through the “Make in India” program that includes ‘Innovations for Defense Excellence (iDEX)’ and other policy support initiatives.

The concept of (iDEX)’ can potentially be a game-changer platform that encourages Indian enterprises and start-ups to connect to Indian defense establishments and help develop new technologies/products in the military domain in the next five years (2021-2026).

iDEX’s mission has attracted the start-up community to participate in the Defense India Start-up Challenge (DISC) program.

(Source IBEF )

The Changing Face of India’s Aerospace, Defense, and Security

 India, one of the world’s largest importers of arms and defense hardware, plans to modernize all its forces with state-of-the-art equipment through long-term perspective plans, capability plans, and capital acquisition plans.

Prime Minister Modi, while launching the C-295 transport aircraft (in collaboration with Airbus Industries) manufacturing facility in Gujarat’s Vadodara sometime back, said that the Defense and aerospace sectors will be two critical pillars for making India ‘Atmanirbhar.’ (self-reliant).

(Source The Economic Times)

As a result of this vision, the Ministry of Defense (MoD) has identified the Aerospace and Defense sector as a focus area for the ‘Make in India’ program and will create a localized manufacturing infrastructure supported by a research and development ecosystem.

India is also opening its space sector for private and foreign participation. This specialized domain could further establish long-term opportunities and partnerships, capitalizing on the synergies in defense and space.

As per Statista, India’s aerospace and defense composite market had a value of US$31.8 million in 2021. It is projected that the Indian aerospace and defense combined market size will increase with a compound annual growth rate (CAGR) of 13.1 percent from 2021 to 2027. The expected market size in 2027 is US $71.2 million.

(Source: Statista)

Italy Shows interest in India’s Aerospace and Defense sectors.

 India and Italy have been seriously working on the defense tie for the past two years. At November 6, 2020, virtual Summit, Italy’s envoy to India, Vincenzo de Luca, informed that Italian defense firms were ready to explore possible avenues of cooperation in joint production or technology transfer. He also emphasized that Rome wanted to foster more vital collaboration between the Mediterranean and the Indian Ocean as part of its Indo-Pacific vision.

(Source The Economic Times)

Italian Aerospace, defense, and security industries hold leadership positions globally due to the technological and industrial capacity of the national supply chain. The Italian AD & S sector employs 45000 directly, generates 1.59,000 plus employment nationally, and contributed 13.5 billion euros to the national exchequer in 2016.

The Italian AD&S supply chain comprises big MNCs, many small and medium-sized enterprises, research centers, and the best universities, giving the industry distinctive characteristics and strengths. It has also an impressive R & D spend annually about the total value added (21.9%). Top global companies like Leonardo, Thales, Boeing, GE Aerospace, Airbus, Collins Aerospace, and MBDA are strategically boosting the security of Italy, the EU, and friendly nations.

(Source: Leonardo)

Italian Aerospace and Defense corporation Leonardo, co-developer of Eurofighter Typhoons, has resumed business with India after seven years (a ban had been imposed on them). With a projected value of about $16 billion, the Indian domestic aviation market is also one of the fastest growing in the world.

(Source: Synergia Foundation)

Looking ahead

 Indo-Italian strategic partnership and defense ties arrive at a critical time when India faces military challenges in western, northern, and eastern borders and has prioritized developing the nation as a formidable power with solid defense and aerospace. India’s policymakers understand the need for a comprehensive national security strategy with indigenous defense and aerospace manufacturing and supply chain capability.

Italy can play a significant role as a partner country in this endeavor as India’s strategic partnership with Italy is gaining strength on all levels—political, economic, and defense cooperation.

Images Courtesy

Images have been added ( from third-party sources with due image courtesy) to make the story readers friendly and add relevance. The author does not claim ownership over these images.

If you want to read more geopolitics posts, please click here.