On 29 December, the Minister of Foreign Affairs of India, His Excellency Dr S.Jaishankar, was on a two-day mission to Cyprus.
Bilateral relations between both countries have been traditionally very close and friendly.
In fact, 2022 marked 60 years of diplomatic relations between India and Cyprus.
During the visit of the Indian Foreign Affairs Minister, three important agreements were signed between the two countries relating to (a) Defence and security cooperation, (b) Declaration of intent for the Migration and Mobility Agreement and (c) International Solar Alliance in line with the Paris Agreement on climate change.
Moreover, a range of areas was discussed between the Ministers of the two sides where Cyprus and India are working increasingly closely and have the scope to develop the existing economic and diplomatic links further.
More specifically, the seven areas that were identified and agreed that Cyprus and India should work forward are as follows: Finance, Shipping, Tourism, Knowledge-Economy, Mobility flows, Third country projects and Collaboration in the Mediterranean region.
Cyprus is among the top 10 investors in India, with cumulative investments of USD 12 billion from April 2000 – September 2022.
These investments as foreign direct investment equity inflows were in sectors including services, computer and software, auto manufacture, manufacturing industries, real estate, cargo handling, construction, shipping and pharmaceuticals.
Cyprus is classified in Funds as Foreign Portfolio Investors (“FPIs”) eligible for Category I licence.
It is one of the three countries outside the Financial Action Task Force countries to obtain such approval from the Central Government of India.
This classification offers the facilitation of investment funds from Cyprus for investors and asset managers in the Indian markets.
In December 2021, Invest India and Invest Cyprus signed a Memorandum of Understanding, which aims to strengthen bilateral efforts to increase mutual investment activities and support business cooperation between India & Cypriot companies.
Cyprus can act as a keystone for attracting, managing, structuring, and channelling trade and investment flows into Europe and India while offering a conducive and efficient setup to foreign entities.
Towards these ends, it can capitalise on the country’s intrinsic strengths linked to its business climate, investment-grade status and compliance with international norms and standards, regulatory framework, political and social stability, investment protection conventions, flight connectivity, infrastructure set-up and highly skilled workforce.
The visit of the Indian Foreign Affairs Minister to Cyprus sent a positive signal of the strong relationship shared by the two countries, clearly demonstrating the willingness for further collaboration and development of economic and political links at the highest level.
There is huge optimism among all stakeholders that these initiatives will succeed in injecting new impetus into Cyprus-India relations, which is expected to enhance business collaboration and boost trade for sustainable growth between the two countries.
By Chrysilios Pelecanos, Partner Head of Indirect Tax PwC Cyprus & Keshav Doolar, Manager Direct Tax Advisory PwC Cyprus