Cyprus Rising: A New Era of India-Cyprus ties

On 15 June, 2025, the historic visit of Indian Prime Minister Narendra Modi to Cyprus marked a pivotal moment in the island nation’s ascent as a geopolitical and economic powerhouse.

This landmark visit underscored Cyprus’s emerging role as a vital bridge in the transformative India-Middle East-Europe Economic Corridor (IMEC), positioning it at the heart of global commerce and connectivity. With a vibrant Indian diaspora, strategic agreements, and a dynamic business roundtable, the visit heralded a new chapter in India-Cyprus relations, poised to reshape trade, innovation, and strategic collaboration.

The visit commenced with a warm reception by the Indian diaspora to the PM Narendra Modi. He interacted with members of the Indian diaspora as he arrived at a hotel where a business roundtable meeting was scheduled. There are approximately 11,000 Indians origins people living in Cyprus and contribute to Cyprus’s economic landscape in sectors like IT, fintech, and shipping.

The India-Cyprus Business Roundtable

A centerpiece of the visit was the India-Cyprus Business Roundtable, co-chaired by PM Modi and Cyprus President Nikos Christodoulides. Attended by leaders from banking, finance, defense, shipping, logistics, digital technology, AI, IT services, and tourism, the roundtable sparked discussions on forging a robust economic partnership. PM Modi emphasized that Cyprus is a gateway for Indian groups to Europe, while President Christodoulides pledged support for IMEC initiatives, reinforcing Cyprus’s role as a hub for Indian businesses entering the EU. Chrysilios Pelekanos, PwC Cyprus Tax Partner and President of the Cyprus-India Business Association, actively participated, gaining valuable firsthand insights into the discussions.

The roundtable resulted in actionable commitments, including the exploration of direct air connectivity to boost tourism and investment. With Cyprus set to assume the Presidency of EU Council in 2026, optimism abounds for concluding the EU-India Free Trade Agreement, which promises to enhance market access and bilateral trade.

The visit culminated in a series of agreements that deepened India-Cyprus cooperation across multiple sectors:

- Capital Markets Integration - An MoU between the NSE International Exchange (NSE IX) at GIFT City and the Cyprus Stock Exchange (CSE) will enable dual listings, foster innovative financial products, and promote financial literacy.

- Digital Payments Revolution: An MoU between the National Payments Corporation of India (NPCI) and Eurobank Cyprus introduced Unified Payments Interface (UPI) services for cross-border transactions.

- Defense and Security Collaboration: Agreements for enhanced cooperation in cybersecurity, maritime domain awareness, and joint naval exercises, with an information exchange mechanism to combat terrorism.

- Mobility and Education: A joint declaration outlined a comprehensive partnership, including a Mobility Pilot Program Arrangement by 2025 to facilitate professional and student exchanges.

Cyprus as a Gateway to Europe and Western world for Indian groups

Cyprus’s strategic location in the eastern Mediterranean positions it as a backbone in the IMEC, a visionary sea-and-rail trade corridor connecting India, the Middle East, and Europe. Its world-class ports and maritime infrastructure make it an ideal transshipment and logistics hub, encouraging Indian shipping presence and integrating supply chains from East to West. Cyprus’s Commonwealth ties and proximity to major shipping routes further enhance its appeal, reducing trade costs and boosting connectivity.

As a Foreign Portfolio Investment Category I country, Cyprus serves as a trusted platform for channeling Western investments into India. Its EU membership, investor-friendly tax regime, and advanced financial services sector make it an attractive hub for multinational corporations. With the EU-India Free Trade Agreement on the horizon, Cyprus is well-positioned to advocate for stronger EU-India ties, amplifying its role as a gateway for Indian companies entering the European market.

PM Modi's recognition of Cyprus as a gateway for Indian companies expanding into Europe and the Western world is a strong vote of confidence of Cyprus well-established role as a trusted hub for Indian businesses.

The blend of high-quality talent, efficient tax regimes and competitive cost of doing business, rooted in a stable English common law system, makes Cyprus an ideal base for multinational corporations anchoring European operations. Cyprus is a strategic hub where business and lifestyle converge. Its forward-thinking policies, from tax incentives to talent attraction, position it as a launchpad for global success.

A Future of Innovation and Collaboration

PM Modi’s visit to Cyprus on 15-16 June 2025, marked a turning point in India-Cyprus relations, laying the foundation for a dynamic and mutually beneficial partnership. By leveraging Cyprus’s participation in IMEC and its investor friendly business framework, India can expand its European footprint and also, attract Western investment.

As Cyprus prepares to assume the EU Council Presidency in 2026, its role as a trusted bridge between East and West is more critical than ever. This visit has not only strengthened economic and strategic ties but also positioned Cyprus as a key player in India’s global ambitions, fostering a partnership rooted in innovation, trade, and shared aspirations for a connected world.

*Keshav Doolar, Senior Manager, Tax Advisory Services, PwC Cyprus