Business Remedies | Charu Bhatia | June 19, 2025 | India and Cyprus, though geographically distant, have enjoyed warm and multifaceted ties for decades. What began as a diplomatic relationship rooted in shared Commonwealth values and non-aligned solidarity has gradually evolved into a dynamic economic partnership. Today, trade, investment, and collaborative innovation are driving new momentum in India-Cyprus relations, particularly in the wake of shifting global economic realignments.
A Historical Overview
Formal diplomatic ties between India and Cyprus were established in 1962, soon after Cyprus gained independence. The two nations bonded over common values, democracy, sovereignty, and mutual respect for territorial integrity. Over the years, the relationship expanded beyond politics into cultural, educational, and economic domains.
Trade and Investment: A Two-Way Street
While bilateral trade between the two countries remains modest in volume, hovering around $200-250 million annually, it has been marked by consistency and a diverse basket of goods. India exports pharmaceuticals, textiles, machinery, and iron and steel products to Cyprus, while importing industrial and electrical machinery, plastics, and chemicals in return.
The investment relationship, however, tells a different story. Cyprus has long served as a preferred conduit for foreign direct investment (FDI) into India. At its peak, Cyprus was among the top ten foreign investors in India, particularly in sectors like real estate, infrastructure, financial services, and IT.
Much of this was driven by favourable tax structures and bilateral agreements. The India-Cyprus Double Taxation Avoidance Agreement (DTAA), revised in 2016, brought more transparency and cooperation in tax matters, paving the way for cleaner and more strategic investments. Since then, the emphasis has shifted towards genuine business partnerships, moving away from earlier practices that sometimes involved round-tripping or tax arbitrage.
Emerging Sectors of Collaboration
In recent years, both nations have shown interest in expanding economic cooperation beyond traditional sectors. Key areas of focus now include:
8 Shipping and Maritime: Cy-prus, as a major maritime hub in Europe, is looking to attract Indian ship-owning companies and collaborate on maritime education and ship management.
8 Technology and Innovation: Startups, fintech, and cybersecurity are emerging sectors where India and Cyprus see significant potential. Cyprus offers a gateway to the European Union market, while India brings talent and scale to the table.
8 Education and Tourism: Cy-prus is increasingly becoming a destination for Indian students pursuing higher education in medicine and business, while India is looking to boost outbound tourism and medical travel from Cyprus.
8 Energy and Sustainability: Discussions around green energy partnerships, especially in solar and wind sectors, have been initiated, with Cyprus supporting India’s International Solar Alliance initiative.
Written & Edited By:
Charu Bhatia
