In late game an attempt should be made to conquer rich British, Dutch and Belgian colonies and become independent from Russians before Axis starts fighting them. CAG or CAS together with starting NAVs all based in small squadrons on many Mediterranean islands can be a real menace for enemy shipping, much worse than submarines. italy is one of the primary Fascist nations and is thus ruled by fascism. Our allies betrayed Italy and stabbed us in the back when they broke the Pact of London. The ideal 1940 Regia Marina composition is 6 Battleships and 1 Carrier or to save leadership on many costly Carrier technologies, just 8 Battleships with escorts. If Italy builds up its military and industry (the faster the better), attacks France and manages to encircle and destroy enough units to cripple the French military, Italy could conceivably defeat France before 1940, allowing them to more than double their industrial potential if they annex France, or acquire a nice source of manpower if they puppet them.

It's much much faster to only hold Yugoslavian border with them and punch through their lines along the coast. In the Great War of 1914 to 1918, Italy entered the war based on the promise by France and the United Kingdom that Italy would be guaranteed a fair share of the spoils of victory upon Germany's and Austria-Hungary's defeat.

Hearts of iron 3 italy