"Currently, bilateral trade is pegged at 2.5 billion euros. We foresee an increase of 10 per cent after 'Festa Italiana' and up to 15 per cent by the end of this fiscal," Andrea Bonardi, secretary general, IICCI, said in New Delhi.

The two-week festival will be held simultaneously in Mumbai, Delhi, Kolkata, Chennai and Bangalore from December 2-16, 2004, he said, adding the increase will be especially seen in the fashion and food sectors.

"India has shown keenness to open up its economy and Italian companies have evinced interest in doing business. But Indian bureaucracy, duties and the tax system are three factors proving to be obstacles preventing Italy from coming to India in a big way," Bonardi said.

"Besides increasing bilateral trade, we also aim at creating the right perception of India in Italy as a long-term result of this festival," he said, adding the Italian media will also cover the event to project a modern and sophisticated side of India in the European nation.

Leading Italian fashion designers Zegna and Valentino will also take part in the festival, IICCI President Narinder Nayar said. "Events like this help to generate interest, even tourism gets promoted," Nayar said.

The festival, being organised in India for the third successive year, will showcase the 'best of Italy' in fashion food, jewellery and books among others.