NEW DELHI, Feb 15: The emergence of India and China as global players is transforming world politics and economics, and Asia's rapid social and economic development is a 21st-century reality.

To build "solid relations" with this new reality is an "absolute priority" that is essential for the future of Europe, Italy's president Carlo Azeglio Ciampi told a gathering of Indian and Italian business representatives and politicians here on Monday.

"We are already building this future: India is the European Union's largest trading partner and Italy's relations with India need to be viewed as part of this bigger picture," said Ciampi, a former prime minister, treasury minister and governor of the Bank of Italy.

Ciampi was addressing the "Italy and India Business Week" forum, which is being attended by over two hundred delegates from Italian firms, as well as four Italian cabinet ministers and the head of the Italian business association Confindustria, Luca Cordero di Montezemolo, who said Italy views India as a "priority partner...central to the internationalization of Italian companies".

The visit was focussing on seven priority areas - infrastructure, heavy industry, telecommunications, food processing, logistics, furnishings, textiles and design with a view to establishing "lasting, long-term relations", Montezemolo said.

"However, specific norms are needed to get rid of tariff barriers, and to further open up important Asian market sectors to foreign investment, such as distribution and financial services. Also in this regard, the European Union is a friend and ally," Ciampi stressed.

Italy is lagging behind other countries in its presence in Indian markets, and to maintain their competitiveness Italian firms cannot afford to miss out, according to Ciampi. "For Italy, India is a huge opportunity," he said.

"The competitive advantage of Italian companies, who are strongly oriented towards manufacturing, and that of Indian firms, make them perfect business partners," Ciampi continued.

"The expansion of economic relations between the two countries is the future," he added, reminding the audience that Italian chemical and car manufacturers had had an Indian presence since the early 1950s.

"This industrial tradition must serve as a catalyst. We are behind, and must make up for lost time. We had a bigger presence in India when external conditions were unfavourable and the Italian economy was weaker than it is today," Ciampi continued.

"Italy needs to apply itself with today's resources and capacity, but with yesterday's spirit," he said, warning that Italian firms now faced stiff competition in India from hundreds of other European and American companies of differing sizes, many of which stood to carve out "pre-eminent positions" in the Indian market "within a few years".

"Italian manufacturing is vital and dynamic, but it can only remain competitive if it conquers the emerging markets. These two things are certain. The challenge is a critical one and we must not delay in meeting it. There will be no room for latecomers," Ciampi concluded. -Dawn/ Adnkronos News Service