India for Italian companies: why export alone no longer works.

A CEO Guide to Understanding Opportunities, Operational Realities, and Long-Term Growth in India

Introduction: India Rewards Strategic Exporters

Why do most Italian exporters fail to scale in India despite strong demand?
Because export alone no longer works in a market defined by operational complexity.

India is no longer a secondary export destination for Italian companies. It is becoming a strategic growth market with increasing relevance across manufacturing, industrial partnerships, sourcing, and long-term regional operations.

With strong economic fundamentals, a rapidly expanding industrial base, and growing integration into global supply chains, India offers scale and long-term potential for Italian exporters willing to align with the market’s operational realities.

At the same time, ongoing EU–India Free Trade Agreement negotiations are expected to further strengthen trade integration and improve long-term market accessibility between the two economies.

2025 Bilateral Trade Snapshot: India–Italy

The India–Italy trade relationship continued its upward trajectory in 2025. According to the Embassy of India in Rome, total bilateral trade stood at €14.25 billion, with India’s exports to Italy reaching €8.55 billion and Italy’s exports to India amounting to €5.70 billion – keeping the trade balance firmly in India’s favour at €2.85 billion. India also remains Italy’s 5th largest export market in the Asia-Pacific region, accounting for approximately 9.8% of Italy’s total regional exports.

Looking ahead, both governments have set an ambitious target of growing annual bilateral trade to €20 billion by 2029, as reaffirmed during high-level diplomatic engagements – signalling strong institutional confidence in the long-term potential of this corridor.

Understanding the Indian Market: Scale With Structural Opportunity

India is emerging as one of the key engines of global growth, supported by strong GDP expansion, infrastructure investments, manufacturing incentives, and approximately $710 billion in foreign investment inflows over the past decade.

For Italian companies, the opportunity goes beyond market size alone.

India combines:

• A population of over 1.4 billion
• A rapidly growing industrial and middle-class economy
• Rising demand for industrial technologies and advanced manufacturing solutions
• Increasing investments in infrastructure, logistics, renewable energy, and automation

At the same time, India is positioning itself as a regional manufacturing and supply chain hub within global value chains.

Many Italian companies initially approach India as an export destination. However, successful companies increasingly evolve beyond exports into:

• local distribution structures
• sourcing operations
• engineering support
• regional warehousing
• assembly or manufacturing partnerships

India is therefore no longer only a sales market. It is increasingly becoming part of long-term global operational strategy.

A Strengthening Italy–India Economic Partnership

Economic relations between Italy and India have entered a new phase of acceleration.

• More than 700 Italian companies already operate in India through subsidiaries, joint ventures, sourcing operations, or distribution structures
• Italy remains among India’s leading European trading partners
• Bilateral initiatives such as the Joint Strategic Action Plan 2025–2029 continue to strengthen industrial and technological cooperation between the two countries

The relationship is also becoming increasingly two-directional, with growing Indian investments in Italy and stronger institutional collaboration across manufacturing, engineering, energy transition, and technology sectors.

For Italian industrial companies, this creates a more stable and supportive environment for long-term expansion.

India’s Industrial Transformation: What It Means for Italian Exporters

India is undergoing a structural transformation in its economic model.

Rather than remaining primarily an import-driven market, the country is actively positioning itself as a global manufacturing hub through initiatives such as “Make in India,” industrial corridor development, infrastructure expansion, and production-linked incentive schemes.

For Italian exporters, this shift carries important implications.

Demand is increasingly focused on:

• industrial machinery
• manufacturing technologies
• automation solutions
• engineering expertise
• advanced components and know-how

As a result, successful export strategies increasingly align with India’s industrial development priorities rather than focusing purely on finished product sales.

Italian companies that position themselves as long-term industrial partners rather than transactional exporters are likely to build stronger and more sustainable market positions.

Where Italian Exporters Can Win

Italian companies already benefit from strong positioning in sectors closely aligned with India’s growth priorities.

Industrial Machinery & Manufacturing

Industrial machinery and manufacturing solutions account for a major share of Italian exports to India. As Indian industries modernize, demand for automation systems, precision engineering, advanced production technologies, and process optimization solutions continues to increase.

This creates a natural opportunity for Italian industrial capabilities.

Green Technologies & Infrastructure

India’s investments in renewable energy, sustainable infrastructure, and energy transition are creating strong demand for engineering expertise and high-quality industrial technologies.

Italian companies operating in clean technologies, energy efficiency, industrial systems, and sustainable manufacturing can benefit significantly from these developments.

Agri-Food & Processing Technologies

India’s food processing and cold-chain infrastructure sectors are expanding rapidly due to evolving consumption patterns and supply chain modernization.

This creates opportunities for Italian companies in:

• food processing technologies
• packaging machinery
• logistics systems
• premium food products

Consumer Goods & Lifestyle Industries

India’s growing middle class is driving rising demand in:

• fashion
• luxury products
• tourism
• design-oriented consumer segments

Italian brands continue to benefit from strong perception and recognition in these sectors.

What Italian Exporters Commonly Underestimate About India

India offers significant opportunities, but operational complexity often determines long-term success more than product quality alone.

Many companies approach India through distributors, agents, or indirect export models expecting the market to operate similarly to Europe. However, India requires local adaptation, operational visibility, and long-term execution discipline.

Common challenges international exporters face include:

• Regulatory and certification requirements such as BIS registrations
• Import duty and HSN code complexities
• Transfer pricing scrutiny for related-party imports
• Warehousing and logistics structure decisions
• After-sales service expectations
• Regional market fragmentation
• Price sensitivity combined with high quality expectations

Companies that rely purely on exports without understanding local operational realities often struggle to scale sustainably.

In many cases, operational blind spots—not market demand—become the real barrier to growth.

“For Italian companies, India is no longer just a market for exports; it is emerging as a key destination for long-term growth. Rapid industrialisation, large-scale infrastructure investments, and growing demand for advanced technologies are creating significant opportunities across sectors. The growing momentum in India–Italy relations, supported by the Special Strategic Partnership, is further strengthening the foundation for deeper trade, investment, and technology collaboration.

However, succeeding in India requires more than offering high-quality products and technological expertise. It calls for a strong understanding of the local business landscape, including regulations, market dynamics, distribution channels, customer expectations, and the importance of building long-term relationships. Italian companies that combine their renowned engineering and innovation strengths with a committed local presence and an India-focused strategy will be best placed to build sustainable businesses and unlock the full potential of this dynamic market.”

— Manoj Madachery
International Business Advisor India, M+V Altios

What European Companies in India Are Actually Experiencing

Across industrial sectors, European companies operating in India increasingly report that execution challenges are becoming more important than market-access challenges.

Recent industry observations indicate that:

• Around 75% of companies cite regulatory complexity and compliance management as key operational concerns
• More than 60% struggle with balancing import costs against Indian market price expectations
• Many companies face visibility gaps when operating through indirect distributor-led models
• Talent acquisition and retention continue to impact long-term operational stability

Companies with stronger local integration, operational visibility, and structured governance generally outperform those operating through purely transactional export models.

SCM Group case study and The Importance of Local Integration

In India, export success increasingly depends on local integration.

The most successful international companies combine exports with:

• local partnerships
• warehousing structures
• technical support
• sourcing operations
• direct operational presence

This allows companies to better understand market dynamics, improve responsiveness, and build stronger long-term relationships with customers and partners.

A practical example can be seen in the experience of SCM Group, the Italian leader in secondary woodworking machinery.

While evaluating its expansion strategy in India, SCM Group required clarity not only on market demand, but also on the broader operational ecosystem surrounding its India business.

The company needed support in:

• evaluating different business setup structures
• competitor benchmarking
• understanding import duties and HSN code implications
• assessing warehousing models including bonded warehouses and FTWZ structures
• identifying suitable locations for office and warehouse operations

A detailed operational and feasibility assessment enabled the company to optimize logistics, supply chain structuring, and operational costs while positioning its products more effectively in the Indian market.

The case reflects a broader reality for international exporters entering India: long-term success depends not only on having the right product, but also on building the right operational foundation from the beginning.

Conclusion: India Rewards Long-Term Commitment

Companies that treat India purely as an export destination often struggle to build sustainable scale. Those that invest in operational understanding, local integration, and long-term positioning consistently outperform over time.

As India continues evolving into a global manufacturing, sourcing, and consumption hub, the opportunity for Italian companies will continue to expand.

The companies that succeed will not necessarily be the ones with the lowest prices, but the ones best prepared to adapt, execute locally, and build enduring market presence.

What differentiates ALTIOS is the combination of market intelligence and operational execution. While many advisory firms focus on strategy, ALTIOS manages regulatory coordination, supply chain structuring, and local implementation across 25+ countries.

FAQ: India as a strategic export market for Italian companies