It's Italy week in New Delhi. The Festa Italiana, in its fourth year and now in five cities (look out for it in Mumbai, Kolkata, Chennai and Bangalore as well), is back, and this year, it's brought food, football and fashion with it.

There are workshops underway courtesy of AC Milan's under 18 team; and a fashion show by designer Gianfranco Ferre, lately of Christian Dior, was held at New Delhi's new Shangri-La hotel on Thursday night. It's not all glamour though; some people have flown down to New Delhi specifically to talk business.

"In Italy," says Fabio Marangoni, the president of the famed Istituto Marangoni, based in Milan and London, "we look upon fashion as a business like any other."

It's obviously been a successful doctrine for him; some of the more famous alumni of the Istituto Marangoni include Franco Moschino, Domenico Dolce (of Dolce & Gabbana), Alessandra Facchinetti (of Gucci) and Alberto Cant� (of Armani).

These are some of the most successful fashion houses in the world; how does Marangoni view the Indian fashion industry?

"India is at the stage that Italy was in the seventies," he says. "It has already established its power of production, now all that needs to happen is that individual designers need to tie up with corporations. India will soon lose its competitive advantage in cheap labour (already, countries like China are starting to overtake it), so it needs to establish itself in another way."

Corporatisation is a trend that is only just starting to take off in India. There have been some tie-ups (most recently, that of Manish Arora with Reebok), and there have been some structural reforms, but by and large the change has been unhurried, and things are continuing as they always have.

Marangoni's message is clear: "Designers have to realise that they can't do anything without the power of big industry behind them. They also need a market; so on either side, they need to follow the economics of their trade."

Mario Boselli, the president of Giulia Pirovano, and the man who spearheads Milan Fashion Week, was also in New Delhi, and in full agreement.

"This is a change that is definitely going to take place, sooner or later. India has a huge production capacity - over 90 per cent of the embroidery that Italian designers use are worked here in India, for instance. The capacity of the Indian industry to export is overwhelming. What it needs is a balance between the creativity of the designers and this industrial capacity."

Perhaps what would bring the change about much sooner is to catch designers at their source - that is, in school. At the Istituto Marangoni, design is taught hand in hand with business, and this is something Marangoni thinks may be lacking in schools here.

"Education is important, but the schools should work in parallel with companies and the industries. There should be business courses, and projects done within the structures of big business. Otherwise, they just become art schools," he says.

It's true that there are not many business courses at leading institutes like the National Institute of Fashion Technology.

"We do have a fashion management studies course," says a NIFT official, "but we really don't have as many business courses as I'd like. We did use to, we had private consultancies and so on, but now all that has withered.

"There has been a tendency of the management to look inwards, and be suspicious of outside connections. I hope this changes, in fact I think it has to, because otherwise students will soon realise that they are not being taught anything about the environment in which they are expected to work."

All in all, the meeting of the Indian and Italian fashion industries has brought about a healthy dialogue and an interesting exchange of ideas. Three students in Mumbai have even won scholarships to the Istituto Marangoni.

The winner, said Marangoni, impressed him because "he used an Indian style in his clothes - the clothes themselves were contemporary (they would not have an international market if they weren't), but the young man cleverly realised that it pays not to forget your roots and your culture."

This is not sentimental nostalgia: however much the Indian fashion industry can learn from its Italian counterpart, our real business edge lies right here at home: in our Indian fabrics and cuts, and our own sense of style.