Ktm is the European company that sells the most motorcycles in the world. And with its range of high-performance models it is a symbol of the Austrian mechanical engineering industry. It’s a shame that it ended up in a deep crisis and the Indian group Bajaj took care of saving it. A historic but not entirely surprising turning point: at the last international motorcycle fair in Milan, Eicma, one of the stands full of innovations was dominated by the Royal Enfield brand, the oldest company in the sector still in business, also Indian.
Of course, the motorcycle sector is a niche sector in Europe (but certainly not in Asia where millions of people travel on two wheels): however it is a good indicator of the technological and commercial aggressiveness of a country. And India seems ready to challenge China in this race. In short, the largest global democracy led with an almost authoritarian attitude by Narendra Modi is no longer just the nation of call centers and “outsourced” software.
It is an economy that today buys, drives and reinvents entire pieces of global industry. For years the narrative of Asian rise has been an almost exclusively Chinese story, with Beijing described as the “factory of the world” and the epicenter of every value chain. Today, however, while the Dragon’s engine slows down and coexists with problems of debt, demographics and investor confidence, India’s trajectory runs counter to the trend, with growth rates that place it firmly among the most dynamic economies of the G20. In 2024, India recorded GDP growth of around 7 percent (compared to 5 in China) and is preparing to close 2025 at similar levels, with quarters that exceeded the 8 percent threshold, confirming itself as the large economy with the fastest pace of expansion among advanced and emerging countries.
This is not just a post-pandemic rebound, but a structural trend fueled by the growth of the middle class, the digital transition and an explicit government strategy that aims to transform the country into an alternative and complementary production platform to China. Its first major competitive advantage is the size of the domestic market. With approximately 1.4 billion inhabitants and over 65 percent of the population under 35 years of age, the Elephant has a consumer base that is growing not only in number, but above all in purchasing power. The combination of urbanization, widespread smartphone diffusion, digital payments and e-commerce platforms has created an ecosystem in which millions of people enter the formal economy every year, pushing up sales of motorcycles, cars, household appliances, consumer goods and digital services. For many multinationals this means being able to count on sufficient internal demand to justify long-term investments, with India thus becoming both a final market and an industrial base for exports to Africa, the Middle East and the West. Therefore, if in the 1990s and 2000s the local trademark was IT services for large Western companies, today the key word is manufacturing.
The New Delhi government, with programs such as “Make in India” and targeted incentives, clearly aims to move a growing portion of global value chains to its territory, attracting multinationals and encouraging the international scaling of its industrial groups. The result is that the giant is no longer just the country to which call centers or software development were outsourced, but also a production hub for smartphones, electronic components, vehicles, drugs, chemical products and consumer goods.
The new Indian industrial power has very specific names and surnames. The Tata Group conglomerate is perhaps the most emblematic: founded in 1868, active from steel to cars, from IT to aviation, from energy to hospitality, it has over one million employees and a turnover of around 180 billion dollars, integrating domestic production and foreign acquisitions such as Jaguar Land Rover and also the Italian Iveco.
Alongside Tata, the Aditya Birla Group and the Hinduja Group represent two other pillars of a family capitalism that has been able to globalise, with interests ranging from metallurgy to cement, from fashion to renewable energy, from chemicals to financial services, from automotive to media. In the field of the knowledge economy, players such as Infosys, Wipro and Tcs have consolidated India as a global hub for software and technology consultancy, pushing towards high value-added services, automation and artificial intelligence.
In the automotive sector, India’s ability to produce robust, economical and increasingly technological vehicles has become a significant competitive asset. Companies such as Bajaj Auto, Hero MotoCorp, TVS and Mahindra dominate the domestic market and expand in Asia, Africa and Latin America, often with products designed for the needs of emerging countries, but also cultivate the goal of growing in the West. The four-wheeled automotive sector also sees India emerging as a crucial platform for compact vehicles, small SUVs and, progressively, for electric vehicles, with investments from international groups alongside growing domestic players.
The real discontinuity of recent years is the fusion between manufacturing and digital. The country has equipped itself with one of the most advanced public digital infrastructures in the world, the India Stack, which integrates digital identity, instant payments and access to public and private services, now allowing around 900 million people to make direct payments from their mobile phones. It is therefore not surprising that technology giants see India as one of the pillars of their global future: Amazon has announced investment programs worth tens of billions of dollars, Apple has accelerated iPhone production in the country, while Microsoft and Google are strengthening data centers, cloud and artificial intelligence projects dedicated to the Indian market.
For these companies, the nation is a laboratory of low-cost innovation, a huge pool of digital talent and an expanding final market, with the possibility of testing business models that can then be exported elsewhere. Behind this wave of foreign investments there is a combination of factors that are difficult to replicate. The favorable demographics guarantee an abundant and young workforce for many years, reducing pressure on welfare and fueling internal consumption, while the growth of startups, with India already among the top countries in the world for the number of unicorns (companies that have reached a market valuation of at least one billion dollars before listing) signals an unprecedented entrepreneurial vivacity. At the same time, tax reforms, the progressive simplification of regulations in some sectors and the commitment to strengthening infrastructure such as ports, roads and energy networks have improved the context for local and multinational businesses, despite a framework that remains complex.
Geopolitical factors also count: in a world fragmented into blocs, many companies seek to diversify their supply chains by reducing excessive dependence on China, and India, while maintaining its own strategic autonomy, presents itself as a reliable partner for the United States, Europe, Japan and the Gulf countries.
In this scenario, Italy is not starting from scratch. In 2024, trade between the two countries exceeded 14.2 billion euros, with the shared objective of reaching 20 billion by 2029, according to the data and targets recalled in the mission of the Foreign Minister, Antonio Tajani. The vice prime minister’s recent visit to New Delhi and Mumbai, the second in less than eight months, had the aim of strengthening industrial ties, promoting collaboration in strategic sectors such as automotive, renewables, sports technologies, agrifood and infrastructure, and opening new doors to Italian companies interested in the Indian market.
The interest is mutual: for the nation, Made in Italy represents key skills in precision mechanics, automation, advanced agriculture, circular economy, defence, space and valorisation of cultural heritage. Latest example: a 500 million order obtained a few days ago by Danieli for a new steel plant of the Steel Authority of India. After all, many national champions in India have been there for years, often away from the spotlight. Piaggio, for example, produces and sells two- and three-wheeled vehicles for the transport of passengers and goods in the country, adapting its products to local needs and also using the country as a base to serve other Asian markets.
Overall, over 700 Italian companies operate in India, including large groups and SMEs, active in sectors ranging from mechanics to energy, from chemistry to services, often through joint ventures with local partners. For our companies this is a double opportunity. On the one hand, there is the internal market, enormous and growing, in which Made in Italy can play the card of quality, design and technology for the medium-high segments of the urban population, and that of efficiency for the more popular segments, in sectors such as machinery, the automotive supply chain, advanced agriculture and environmental technologies. On the other hand, there is the possibility of using the nation as a production and innovation platform to serve other regions, integrating the Indian presence into the global value chains in which Italian companies are already inserted.
There is no shortage of challenges: bureaucracy, regulatory complexity, very aggressive local competition and the need to build long-term relationships with reliable partners. But precisely the success of the large Indian groups, the growth in the number of unicorns and Italy’s choice to focus on tools such as a dedicated credit line, loan guarantees and digital platforms to connect businesses from the two countries indicate that the direction is set.
