The Italian government has announced a new initiative, “Misura India,” to boost Italian exports to India by providing subsidised export finance and other trade finance instruments.
The plan, administered by Italian export finance agency SIMEST, is part of a wider push to boost Italian trade with the Global South, the government has said – especially as many fear losing Western markets due to shrinking demand and new tariffs.
£173 million of the funds will go directly towards providing extremely subsidised export financing with interest rates no higher than 0.6%, mainly intended for firms entering the Indian markets or starting joint ventures in the country. The remaining £259 million will be used to expand SIMEST’s existing trade finance instruments, including guarantees, trade credit insurance, and letters of credit. This is expected to help firms which already have a small presence in India expand further and access more working capital to strengthen existing contracts.
The initiative was finalised by the government on 31 July and will come into effect on 15 September, when firms will be able to apply for the loans online. The announcement also included similar smaller funds to support exporters in Africa and Latin America, of £7.1 million and £1.3 million respectively.
The plan marks the start of a wider effort to increase Italy-India trade relations and access new markets for Italian goods, including high-end fashion, food, and pharmaceuticals. Italy has a £1.25 billion trade deficit with India and is one of the country’s largest EU trading partners, with Italian imports to India steadily growing since 2021. 773 Italian firms have a presence in India out of 6,000 EU firms, a sizable presence that is also expected to keep growing.
This push for increased collaboration comes as India takes a bigger role in the global trade stage, especially amid the recent flurry of US tariffs. The US just announced 50% tariffs on India, set to take effect before the end of the month, which amount to some of the highest rates on any country. The UK, on its part, recently signed a landmark trade deal with India, expected to increase trade between the two countries by £4.8 billion in the next few years.
While EU countries are not empowered to negotiate their own trade agreements or tariff exemptions, large export finance boosts like this one can be a way to boost bilateral trade and encourage access to growing markets.
