Insights | 18 December 2023

Chrysilios Pelekanos , President, Cyprus-India Business Association

Cyprus offers a comprehensive business ecosystem making it a compelling prospect for Indian enterprises setting their sights on Europe, and there is considerable room to enhance the current trade volumes and investment flows between Cyprus and India.

How would you describe the current trade relations between Cyprus and India? 

Regarding trade relations, Cyprus is among the 10 largest investors in India with an accumulative investment of US$12 billion during the last two decades. Cyprus is classified as Foreign Portfolio Investors (FPIs) eligible for a Category 1 licence, and is one of the three countries, outside Financial Action Task Force (FATF) countries, to obtain such an approval from the Central Government of India. This classification offers facilitation of investment funds from Cyprus for investors and asset managers in the Indian markets, further cementing Cyprus' reputation as a prime hub for businesses navigating the European and Indian markets. 

Furthermore, the potential for expanding these trade relations is enormous. There is considerable room to enhance the current trade volumes and investment flows between Cyprus and India. With increasing globalisation and the ongoing development of new economic sectors, both countries stand to benefit significantly from deeper collaboration in areas such as technology, renewable energy, tourism, and maritime trade. This untapped potential offers a promising avenue for future growth, reinforcing the already strong ties between Cyprus and India. 

What economic sectors in Cyprus have seen significant investment and participation from India, and in what type of projects and activity? 

In recent years, the economic collaboration between Cyprus and India has expanded significantly, touching various sectors with substantial investments and active participation. The key areas of focus include fintech, renewable energy, shipping, and tourism.

In regard to fintech and information technology, India's renowned expertise in IT and innovative fintech solutions has found a receptive market in Cyprus. The island’s stable regulatory framework, combined with its strategic location as a gateway to Europe, has made it an attractive destination for Indian IT firms and fintech start-ups. Projects in these sectors often involve the development of digital banking solutions, cybersecurity innovations, and blockchain technologies. 

As the global emphasis on sustainability grows, the partnership between Cyprus and India in renewable energy has gained momentum. Indian companies have been involved in various projects in Cyprus, focusing on solar energy development, wind energy, and other sustainable technologies. This collaboration is strengthened by Cyprus' commitment to green energy initiatives and India's vast expertise and market in renewable energy. 

Cyprus' established reputation in shipping and maritime services has attracted Indian investments. Indian companies are engaging in joint ventures and collaborations in shipping operations, maritime logistics, and related services, leveraging Cyprus' strategic position in the Mediterranean. 

With Cyprus being a popular tourist destination, there has been a growing interest from Indian investors in the tourism and hospitality sector. This includes investments in hotel and resort developments, travel services, and cultural exchange programmes aimed at boosting tourism between the two countries. 

These sectors represent just a snapshot of the diverse range of activities and projects where Indian investment and participation are making a significant impact in Cyprus. The collaboration between the two countries continues to evolve, opening new avenues for economic growth and mutual benefit. 

What advantages does Cyprus offer specifically to Indian companies and investors? 

Cyprus' strategic location at the crossroads of Europe, Asia, and Africa naturally positions it as a 'Gateway to Europe'. For Indian enterprises eyeing a European venture, Cyprus offers a unique blend of benefits. Cyprus boasts a robust legal system that instils investor confidence and a tax structure acclaimed for its competitive edge, benefiting both corporations and individuals. The island's reservoir of multilingual, educated talent is a boon for companies seeking a skilled workforce. 

Furthermore, Cyprus' commitment to international standards, showcased by its investment-grade status and unwavering adherence to global norms, amplifies its appeal. This, combined with a tranquil political landscape, strong regulatory framework, expansive flight connectivity, and state-of-the-art infrastructure, underscores its allure. Rounding off its merits, Cyprus' flexible migration policies cater generously to non-EU shareholders, providing businesses the freedom to harness global talent. In essence, Cyprus offers not just a geographical pivot but a comprehensive business ecosystem, making it a compelling prospect for Indian enterprises setting their sights on Europe. 

We have recently seen a growing trend amongst non-EU multinational corporations aspiring to plant their flags in European territories, and Cyprus could serve as an ideal sandbox for businesses aiming to familiarise themselves with EU regulations. Its smaller scale offers a less stringent and easy-to-navigate environment to test the waters and adapt to European standards at a relatively lower cost compared to larger continental European countries. On the other side, the fact that Cyprus ranks among the top 10 countries in India with cumulative investments of US$12 billion during April 2000-September 2022, underscores its pivotal role in Indo-European economic dynamics. 

What new prospects and opportunities could be cultivated to facilitate more business between Cyprus and India? 

The collaboration potential between India and Cyprus is vast and goes beyond the traditional sectors. Consider the rise of domains like fintech, renewable energy, and agrotech. These are not merely emerging industries; they are the frontiers of the future, teaming with opportunities yet to be harnessed. 

India has carved out a name for itself in the global landscape with its impressive IT talent pool and ground-breaking tech innovations. It's not just about the sheer numbers; it's the quality of innovation and the speed of adaptation that sets India apart. Pair this with Cyprus' robust regulatory environment and strategic positioning, and we have a formula for success in the fintech sector. Cyprus, serving as a platform to the European market, can be a formidable ally for Indian start-ups and businesses aiming for a European presence. 

Similarly, the realms of renewable energy and agrotech offer avenues for synergistic growth. As global focus shifts toward sustainable energy, Cyprus' policies and commitment to green initiatives can find a perfect partner in India's technological prowess and its vast renewable energy market. 

On the flip side, Cyprus' enviable position in shipping and tourism presents a lucrative proposition for India. With its vast coastline and a booming middle-class population with an appetite for travel, India can significantly benefit from Cyprus' established shipping routes and renowned tourist hotspots. Cyprus can serve as a preferred destination for Indian tourists while also acting as a logistics hub, catering to India's expansive export market. 

Moreover, the synergies are not limited to industries. It's about creating an ecosystem where businesses from both countries can thrive. This can range from provision of training and education in established industries in Cyprus to India's young and dynamic workforce and/or India's IT hubs offering tech solutions to Cypriot enterprises. The possibilities are endless. In essence, this collaboration isn’t about one country benefiting at the expense of another. It’s a win-win. It's clear that this is not a one-sided partnership, both nations bring unique and invaluable strengths to the table. 

How does the Cyprus-India Business Association (CIBA) support and foster business links between the two countries? 

CIBA envisions a dynamic role in shaping the business landscape between India and Cyprus. The roadmap has always been ambitious yet achievable. Our key role is the facilitation of more business-to-business engagements, trade fairs, and knowledge-sharing sessions, as well as the organisation of more business delegations between the two countries. These delegations act as a platform for both countries to meet and explore opportunities of mutual interest. 

Other key aims of CIBA are the active promotion of Cyprus as not just a business destination, but as the gateway of India to the European Union, the engagement with policymakers from both countries to ensure a seamless business environment and to foster collaborations in emerging sectors to encourage joint ventures and investments. 

At the end of the day, we're all about building strong, lasting business ties that help both our countries grow. We value our shared history and trust. With that foundation, we're ready and excited to work together for a brighter future for both India and Cyprus and to write the next promising chapter together.

Cooperation Partners
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