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Cyprus sees potential for deeper business relations with India

cyprus india
Nicosia (left); Bangalore (right)

Cyprus and India can mutually benefit through a deeper and broader economic and business collaborative relationship, according to an analysis released this week by two executives from consulting and advisory firm PwC Cyprus.

Chrysilios Pelecanos, Partner Head of Indirect Tax PwC Cyprus, and Keshav Doolar, Manager Direct Tax Advisory PwC Cyprus, noted that on December 29, 2022, the Minister of Foreign Affairs of India, Subrahmanyam Jaishankar was on a two-day mission to Cyprus, reaffirming that bilateral relations between the countries have traditionally been very close and friendly.

In fact, the two executives noted, the year 2022 marked 60 years of diplomatic relations between India and Cyprus.

authors
Chrysilios Pelecanos (right) and Keshav Doolar (left)

Moreover, during the visit of the Indian Foreign Affairs Minister, three important agreements were signed between the two countries.

These agreements relate to defence and security cooperation, a declaration of intent for a future migration and mobility agreement to be put in place, as well as the International Solar Alliance, in line with the Paris Agreement on climate change.

What is more, several areas were the topic of discussion between the two countries’ ministers, including fields and sectors where Cyprus and India are working increasingly close and have the scope to further develop their existing economic and diplomatic links.

According to reports, the seven areas that were identified and agreed upon for Cyprus and India to deepen their collaboration on include finance, shipping, tourism, the knowledge economy, mobility flows, third country projects, as well as broader collaboration in the Mediterranean region.

“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,” the PwC executives said.

“There is huge optimism amidst all stakeholders that these initiatives would be a success injecting new impetus into the Cyprus-India relations, which is expected to ultimately enhance business collaboration and boost trade for sustainable growth between the two countries,” they added.

Pelecanos and Doolar explained that Cyprus is among the top ten investors in India with cumulative investments of $12 billion between April 2000 and September 2022.

These investments, which come in the form of foreign direct investment equity inflows, were allocated to a variety of sectors.

These sectors include services, information technology, automotive manufacturing, 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,” the two analysts said.

“Cyprus is one of the three countries, outside Financial Action Task Force countries, to obtain such approval from the Central Government of India,” they added, noting that this classification offers the facilitation of investment funds from Cyprus for investors and asset managers in the Indian markets.

Further to the above, in December 2021, Invest India and Invest Cyprus signed a Memorandum of Understanding (Mou) which aims at strengthening bilateral efforts for increasing mutual investment activities and supporting business cooperation between Indian and 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,” Pelecanos and Doolar said.

“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,” they added.

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