Prime Minister Modi has wound up his visit to Italy and there have been gains in key areas including defence. India and Italy hope to raise their bilateral trade from $14.5 billion in 2023-24 to $20 billion by 2029.
The India-EU Free trade Agreement concluded in January 2026 shall open up Central and Eastern Europe to Indian companies. Access to these markets is likely to be better achieved through the Italian port city of Trieste than through other Mediterranean ports, due to the pre-existing connectivity with inland trading hubs across the eastern half of the EU.
Trieste is the northern-most port of the Mediterranean Sea, it is well-connected by railway to Central and Eastern Europe, and it is administered by Italy as a free port outside of European Union customs law.
These three facts explain why Trieste is at the European landing point of the India-Middle East-Europe Economic Corridor (IMEC). They also explain why this city, once described by Winston Churchill as marking the southern extremity of the communist ‘Iron Curtain’ in Europe, has come to host an honorary consul of India since September 2025.
New Delhi sees Trieste and the surrounding Friuli Venezia Giulia region of Italy, of which Trieste is the capital, as an important way point in the India-EU trade relationship.
Italy has been asserting its identity as a maritime nation in recent years, moving away from a continental European policy focus that had previously reduced it to the status of a junior partner to Germany and France.
The latter two countries are the power heavyweights within the EU, and Italy, through Trieste, now seeks to raise its own profile by integrating the port city into two distinct trade corridors: IMEC and the 13-member Three Seas Initiative (3SI).
Additionally, Trieste already hosts the secretariat of the Central European Initiative, a 17-member forum of Central and East European countries set up to promote regional cooperation.
IMEC and 3SI are economic projects with geopolitical implications. Both seek to strengthen Europe’s economic position in the world through multilateral engagement. IMEC aims to reduce trade dependency on maritime choke points such as the Suez Canal and Bab el Mandeb at the northern and southern ends of the Red Sea.
3SI aims to reduce European dependence on overland routes from Russia and China. Both projects have received support from the United States, although the rationale for such support is debatable. IMEC was announced under the presidency of Joe Biden, but the tariff offensive undertaken by Donald Trump in 2025 throws into question how much the US wants to see Europe acting as a cohesive geoeconomic entity.
3SI is seen as a project which aims to strengthen the influence of America-friendly Central and East European countries at the expense of West European states that are more likely to oppose American economic and military unilateralism and advocate for European strategic autonomy.
There is a fear driving both trade corridors. In the case of IMEC, the melting of icecaps in the Arctic Sea could open up new maritime routes from Asia to Europe which will reduce the importance of traffic through the Mediterranean, especially once Russia develops its northern ports.
To hedge against a possible loss of relevance, Italy is keen to promote Trieste as a transit point for European trade with Asia. With 3SI, the EU in a bid to boost its global competitiveness has allowed European governments to support their own industrial sectors so as to attract foreign investment.
This has potentially created a situation where wealthier West European countries might have an advantage over their less-prosperous counterparts in Central and Eastern Europe. Strengthening integration among the post-communist countries of Europe, by interlinking the economies of the Baltic, Adriatic and Black Seas, is one way of preserving the comparative advantage enjoyed by low-cost but high-skilled manufacturing hubs in the eastern part of the EU.
Prem Mahadevan is a writer on European affairs based in Switzerland
