Hmm.. this is indeed a very good question, for which I only have a partial answer...
From my knowledge (and I'm 98% sure
), the citizens of EU countries do not need to apply for anything, they can use their driving license just as it is. They can opt to change it, if, say, they want to because they now live in another country (like I am).
However, I am not sure about Americans and citizens or non-EU countries.
The thing is, if you decide to come to Italy in vacation, using your driving license from India or America shouldn't be a problem, since you don't have the residence here. If they decide to stay here for a long time, they I know for sure they have to apply for the Italian one, but if they're on vacation, I'm not really sure..
Now, to actually try to help you with this matter, they should ask either a random driving school or the people at the city hall, they should know how to help them.