From Anish Sankalia:
The President is said to have informed her that according to Section 5 of the Citizenship Act of 1955, she has no right to assume the office of the Prime Minister of India and that he was seeking the advice of the Supreme Court on this issue. Section 5 of the Citizenship Act of 1955 says the rights and privileges allowed to foreigners who become citizens by application (not by birth) are conditional upon the rights and privileges granted to Indians in the country of the concerned person’s origin (in this case Italy).
The President reportedly told Sonia that he had to ascertain the legal position in this matter as there was no confirmation that all the rights and privileges granted to persons of Italian origin are reciprocated by Italy in the case of Indians who become citizens of that country. Sonia is said to have decided not to take the risk after the President’s briefing.
So there. Sort of what happens in commerce — you grant most favored nation (MFN) status to a country only if they grant you MFN. Also, you grant a certain number of landing-slots to the carrier of a foreign country only if they grant you reciprocal rights in theirs.
A naturalized Italian citizen of Indian origin cannot become the municipal commissioner of a third rate town in Italy. India cannot in good conscience reciprocate by allowing a naturalized Indian citizen of Italian origin to become the chief of the executive branch of the government.
Of course, there is a very compelling personal reason for Mrs S Maino Gandhi to not take a shot at the PM’s seat — security. Indian soldiers provide personal security to Indian leaders, not Italian soldiers. At some level deep inside, soldiers have very strong sense of nationality and duty and honor and pride and all sorts of things that make them willing to put their lives in danger for the protection of their motherland. I, as an Indian, would not trust Italian soldiers to keep their guns pointed the right way if I was to somehow get to become the prime minister of Italy.
Be that as it may, it was a pragmatic decision. A challenge in the Supreme Court of India would have been all and she would have been asked to vacate. Better to take the high road and avoid being thrown out, is my guess.