This was indicated in the minutes of the 16th session of India-Italy Joint commission for economic cooperation, signed by Commerce Minister Kamal Nath and Italy's minister for production activities Antonio Marzano, an official release said in New Delhi.
Although the two-way trade between India and Italy has increased to $2.77 billion during 2003-04, both sides noted that it did not reflect the true potential.
Nath said the bilateral trade between the two countries could be doubled to $5 billion within the next two-three years.
Both sides have decided to explore enhanced cooperation in textile clusters and design through National Institute of Fashion Technology besides cooperation in leather, gems and jewellery, food processing, IT, tourism and energy.
On the issue of problems faced by Indian marine products exporters in Italy, both sides have agreed to expedite signing of MoU for aquaculture and fishing products during the state visit of President of Italy Carlo Azegelio Ciampi.
The two countries would set up a bilateral task force for the development of industrial clusters and to foster cooperation between small and medium enterprises.
India has also asked Italy to participate in infrastructure projects and Special Economic Zones.