Geopolitics is concretely reshaping the rules of international trade and global supply chains. For many Italian SMEs, this translates into one key priority: reducing dependence on a single country and building a more resilient supply chain. In this context, India is emerging as a strategic destination—not only as an end market, but also as an industrial platform and long-term partner for international expansion.
The New Scenario: De-risking and Multi-Alignment
In recent years, the pandemic and geopolitical tensions have made it clear how risky it is to concentrate production, sourcing, or sales in one single area—particularly China. This is where the concept of de-risking comes into play: not “exiting” a market, but spreading risk across multiple countries and suppliers, with a focus on operational continuity.
India fits credibly into this trajectory. It is now the world’s fifth-largest economy, with around 1.4 billion inhabitants and sustained high annual growth rates in recent years. Several analyses also point to India as a candidate to become one of the leading global economies by 2030.
For Italian companies, a distinctive element is India’s approach to international trade. New Delhi pursues a strategy of “multi-alignment”, maintaining pragmatic relationships with major economic blocs, driven by mutual economic interests. In an unstable global environment, this approach can translate into greater predictability for companies planning long-term investments, manufacturing facilities, or joint ventures.
High-Potential Sectors: Where to Invest Today
India is not just a vast domestic market; it is a rapidly evolving industrial ecosystem, supported by public programs and private investments across multiple sectors. For Made in Italy, opportunities are particularly attractive where quality, technology, and engineering expertise make the difference.
Renewable Energy and Energy Transition
With ambitious targets for 2030, India is investing heavily in solar, wind, and green hydrogen. Italian companies can find opportunities in components, engineering, energy storage technologies, and energy efficiency solutions, in a market characterized by strong and structural demand.
Automotive and Electric Mobility
India’s automotive market is among those with the highest growth potential. Public incentives and production-linked schemes (including for electric and hybrid vehicles) are fostering the development of local supply chains. For Italian suppliers of components and electrification technologies, the key challenge is early positioning—building industrial relationships and commercial channels before the sector consolidates.
Infrastructure and Construction
India is undergoing an intense infrastructure cycle (roads, railways, ports, airports). This creates opportunities for Italian companies in civil engineering, construction technologies, machinery, and advanced materials—especially where high standards and specialized expertise are required.
Agrotech and Food Processing
The modernization of agriculture and the food supply chain is a powerful growth driver. Italian technologies for processing, packaging, and preservation are highly valued for their reliability and quality, offering attractive margins both for industrial supplies and local partnerships.
Advanced Manufacturing and Industry 4.0
Through the “Make in India” initiative, the country aims to become a global manufacturing hub. Here, convergence with Italian strengths—machinery, automation, robotics, and factory digitalization—can generate industrial collaborations and co-production projects, also supporting supply chain diversification.
Government Incentives: The Production Linked Incentive (PLI) Scheme
Among the most relevant tools to attract manufacturing investments is the Production Linked Incentive (PLI) scheme, one of the most competitive incentive programs globally. Its logic is to reward incremental production in strategic sectors, with incentive rates varying by industry and specific technical parameters.
For Italian companies considering a manufacturing facility or industrial presence in India, the PLI can significantly impact business case profitability. However, its actual effectiveness depends on sector-specific requirements, thresholds, timelines, and eligibility criteria. A detailed legal and regulatory analysis is therefore essential to avoid mistakes that could delay or jeopardize access to benefits.
The Italy–India Strategic Partnership: The 2025–2029 Action Plan
Economic relations between Italy and India have entered a more structured phase. The Joint Strategic Action Plan 2025–2029, signed by Prime Ministers Meloni and Modi, identifies concrete areas of cooperation: industrial co-production, technology transfer, joint R&D, and mobility of skilled professionals. The plan also includes tools to facilitate bilateral projects, such as industrial corridors, simplification measures, and dedicated support channels.
From an industrial perspective, Italian presence in India is already significant: hundreds of companies operate in the country, and several sectors—from automotive to machinery—offer fertile ground for partnerships and investments. At the same time, the potential remains substantial. Many SMEs could benefit from a gradual market entry strategy, combining exports, commercial agreements, and—where appropriate—a local presence.
The Legal Checklist for Companies: What to Verify Before Entering
Diversifying into India requires method. Speed matters, but only when combined with preparation and governance. Before launching commercial or industrial operations, it is advisable to assess several key aspects.
- Optimal Corporate Structure
There are different forms of presence (subsidiary, joint venture, liaison office, project office), each with very different implications for taxation, operations, and governance. The choice should be driven by strategy, not just initial costs. - Sectors with Foreign Investment Restrictions
Not all sectors allow 100% foreign investment, and authorization paths vary by industry (automatic route or approval route). Some activities are subject to specific rules or caps, while others are prohibited. A preliminary assessment helps avoid operational blockages or costly restructurings. - Intellectual Property Protection
Trademarks, patents, and know-how must be protected through procedures aligned with the local system. In particular, the “first to file” principle makes it strategic to act before market entry to prevent opportunistic registrations. - Commercial Contracts and Dispute Resolution
Contracts must be robustly structured (governing law, jurisdiction, dispute resolution clauses). In many cases, international arbitration is preferable, but it must be properly designed from the outset. - Tax Compliance and Transfer Pricing
GST, direct taxes, withholding tax, and transfer pricing require solid structures and documentation. Errors or underestimations can lead to penalties and delays that impact even profitable operations. - Employment Law and Workforce Management
Labor regulations differ significantly from those in Europe. Contracts, terminations, benefits, and industrial relations must be carefully managed to avoid disputes and organizational rigidity. - Due Diligence on Local Partners
In joint ventures or distribution agreements, partner due diligence is critical: financial soundness, reputation, litigation history, and conflicts of interest. A wrong choice can compromise the entire project.
The EU–India Free Trade Agreement on the Horizon
The EU and India are working toward a free trade agreement that, if finalized, could significantly reduce tariffs and non-tariff barriers across many product categories. For Italian companies, this could lower entry costs and provide a competitive advantage for those already equipped with channels, partners, and a commercial presence.
There is also a strategic consideration: when the agreement enters into force, companies already positioned in the market will benefit from stronger relationships, distribution networks, and brand awareness. In many cases, the best time to lay the foundations is before competition accelerates.
In Summary: Act with Method, Move with Speed
For Italian SMEs seeking to diversify markets and supply chains, India represents a rare combination of scale, growth, industrial transformation, and openness to partnerships. It is a concrete opportunity—but one that requires preparation: a clear strategy, an understanding of the regulatory environment, asset protection, and careful partner selection.
Roncucci&Partners supports Italian companies expanding into India with an integrated approach: from preliminary assessments to corporate structuring, from joint venture negotiations to intellectual property protection, from tax compliance to commercial dispute management.
Your company’s future also depends on how effectively you diversify your markets. India is a strategic option: moving in an informed way today can make a decisive difference tomorrow.
For further information on opportunities in India and specialized legal assistance, contact us at this email.
Vita Zinna
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