Monday, June 26, 2000,
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7,000 green cards likely
India, Italy to strengthen trade ties
From Amar Chandel
Tribune News Service

ROME, June 25 — Political as well as economic relations between India and Italy are expected to gain considerable momentum during Prime Minister Atal Behari Vajpayee’s two-day visit to Rome. He arrived at Leonardo da Vanci Fuiumicino Airport this evening to a warm welcome. The Finance Minister, Mr Yashwant Sinha, accompanied him. Also with him is a large business delegation, which is a virtual who’s who of the Indian industry.

Italy is keen to underline its “super-power” status in industrial design and improve its trading partnership with India. It hopes that intimate political interaction will pave the way for enhanced economic cooperation. It may show its goodwill by offering “green cards” to about 7,000 information technology experts from India.

India’s desire is to benefit from Italy’s experience in broadly four fields. In the last few years, it has managed to achieve remarkable fiscal discipline, bring down public debt and inflation. These steps have helped it become an effective partner of the European Union. India can learn from this.

Equally prominent has been its privatisation and disinvestments. This has been slow and steady and achieved with workers’ participation. The sequencing of the reforms has been deftly handled.

Of course, no country model can be mechanically applied but much can be learnt. As Finance Minister Yashwant Sinha said during his interaction with the mediamen traveling with Mr Vajpayee, “We will share notes through intensified contacts”.

Italy also has experience in upgradation and modernisation of medium and small enterprises. What is remarkable is that the frequent changes of governments have not affected the pace of industrialisation and economic reforms.

Mr Vajpayee’s June 25-26 trip is basically a precursor to his first summit meeting with the European Union (EU) at Lisbon (Portugal) from June 27 to 29.

While no official engagement is scheduled for today (Sunday), Mr Vajpayee has a hectic day ahead of him tomorrow. While he will be calling on the President, Mr Carlo A. Ciampi, in the morning, he will be meeting Prime Minister Giuliano Amato in the afternoon. In the evening, he will address a business meeting jointly organised by FICCI and the Confederation of Italian Industry. And to pack the engagements diary even further, a meeting with the Pope has been scheduled in the forenoon. This was not part of the original agenda and has been added at the last moment.

While political stability and irreversibility of economic reforms are not subjects of major concern, representatives of the Italian apex organisation do have misgivings about the excessive tax burden in India, bureaucratic red tape and the tardy speed of economic reforms. Mr Vajpayee is expected to allay their fears in this regard.

While Italy seems set to grant hassle-free residence permits to IT specialists, India on its part is expected to offer investment protection and promotion guarantees.

On the political front, the key subjects of discussion are likely to be a concerted fight against terrorism, the Comprehensive Test Ban Treaty (CTBT) and the UN Security Council membership issue. Italy being a non-nuclear power itself is a strong opponent of proliferation and Mr Vajpayee will have to be at his convincing best to allay the residual criticism arising out of the May, 1998, blasts. Since then, the Foreign Minister, Mr Jaswant Singh, has visited Rome (in January this year) but it is Mr Vajpayee who will have to put forth Delhi’s viewpoint forcefully.

Italy, which will occupy the rotating chairmanship of G-8 for a six-month period, is widely expected to lay strong emphasis on India signing the CTBT, although the latter’s expression of a contrary view is unlikely to cast any shadow on the talks.

Mr Vajpayee will utilise this opportunity to highlight its claim for permanent memebership of the UN Security Council. Rome has been non-committal in this regard so far. Italy is a major contributor to the UN kitty (bigger than even Britain) and wants widespread reforms in the system so that it can emerge out of its secondary status.

While India’s mature diplomacy vis-a-vis Pakistan and Sri Lanka has come in for widespread appreciation, the issue of attacks on the places of the Christians and the targeting of Christian priests may inject a discordant note. In fact, the last-minute inclusion of the Vatican in the itinerary is the result of abundant caution on the issues, given its sensitive nature and possible international ramifications.

But the main focus of the trip is likely to remain on trade and investment. Italy has the fifth largest economy in the world which is characterised by a strong services and industrial sector. There is a predominance of dynamic family-owned small and medium enterprises. India’s bilateral trade with Italy is in the range of $ 2.25 billion. The latter is the 11th largest investor in India with $700 million of approved investment since 1991. Its endeavour is to move up the ladder at double quick, now that India is opening up fast. About 20,000 Italian tourists visit India every month. A framework agreement on tourism is expected to be signed during the visit.
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