A headline on an article yesterday about foreign investment in the Fiat conglomerate should have referred to Libya, not Syria.

Gianni Agnelli, president of Italy's largest industrial conglomerate, said today that efforts by Fiat to buy back a 15 percent Libyan interest in the company had been stymied by Tripoli's refusal even to reduce its holding.

"We have said we are ready to buy their shares, that we would be happy to buy them out," Agnelli told shareholders at their annual meeting here, "but to date they have indicated they are not prepared to sell."

The Libyan issue became a major concern to the company last month, when the U.S. Defense Department suspended a $7.9 million contract with a Fiat subsidiary, Fiat-Allis, for the purchase of 179 earthmovers for the Marine Corps.

A Pentagon spokesmen cited fears that the contract would benefit the Libyan government, which the United States has accused of supporting international terrorism.

Fiat turns out products ranging from automobiles and telecommunications systems to weapons. Agnelli said there had been no direct negotiations with his Libyan partners about their shares or their position on the company board -- currently two of the 15 seats. But "there has been a lot of hinting going on," he added.

The government of Col. Muammar Qaddafi bought its 15 percent of Fiat stock in 1976. Agnelli, whose family helped found the company at the beginning of the century, was in need of capital to survive the slump in auto sales caused by a sudden rise in oil prices.

If the Libyans "would sell their shares back, I would be very happy," Agnelli told a news conference. "But I'm not in a position to do any arm twisting to make them sell." He said there was nothing the Italian government could do either -- "conceivably, legally or hypothetically."

Fiat has maintained that Libya's two representatives on the board had never sought to influence company decisions. But since early this year, when the U.S. government began trying to get European nations to join an economic boycott of Libya, Fiat has been quietly seeking a way of lessening Libya's profile -- at least by persuading Tripoli to transfer their holdings into nonvoting stock, which would then open the way for the two Libyan representatives on the board to be dropped.

In 1976, when many companies in Western Europe were trying to draw petrodollars to offset a near crippling recession, Libya put up $400 million for the 15 percent share of Fiat. Today that investment is estimated to be worth $2.5 billion.

Agnelli said the Libyans had indicated they would be prepared to withdraw from the board if they thought their presence was damaging the company. But, Agnelli said, Libya clearly did not think that was the case.

Although the loss of the earthmovers contract does not represent a major setback for Fiat's business, Agnelli is known to be worried about the effects of the Libyan connection on his hopes to become a major bidder on future Pentagon contracts under President Reagan's Strategic Defense Initiative. He said company lawyers are working on the problem.