Agartala, Apr 24 : India and Italy have to cooperate on the basis of the market economy because it is the market which promotes the cooperation, and not the government, Italy's Ambassador to India, Antonio Armellini, said.

Armellini is in Tripura on a two-day visit along with four other members of his embassy.

His team would examine the possibilities of business in this region for further developing the bilateral trade relationship between the two countries, said Armellini on Thursday evening here during an interaction at circuit house.

"India and Italy have very old trade relation particularly in the two wheeler and four wheeler industries and the existing business are in machine goods industries, leather goods, gems and jewelry, fashion and chemical industries," Armellini said.

"There are further scopes in food, infrastructure and IT sector", the Italian envoy added.

'There are certain sectors like agro-based industry, which Italy masters and can jointly do huge business in India,' Armellini said, adding that at the same time Italy also welcomed participation of Indian counterparts in its country.

Bilateral trade between India and Italy was 6.5 billion dollars in 2006-07, an increase of 45 percent compared to the previous year.

Italy jointly with the Red Cross is funding projects in Tripura, Punjab and Tamil Nadu for eradication of HIV, Tuberculosis, Malaria and drugs addiction, the envoy informed.

The team will cal on Governor D. N Sahay and Chief Minister Manik Sarkar on Friday before leaving for Kolkata in the afternoon.

Italy ranks number eleven in the list of foreign investors in India. (ANI)