India-Cyprus connect: Business bonding and anti-terror solidarity

cyprus-indiaIndia’s diplomatic profile in the Mediterranean Sea region became a few notches higher when visiting Cyprus President Nicos Anastasiades sought New Delhi’s support for the reunification of Cyprus, a part of which is under Turkey’s occupation for 41 years, and the two countries joined hands for decisive action against states sheltering and sustaining terror.

After the meeting with India’s Prime Minister Narendra Modi in New Delhi on April 28, Mr Anastasiades, who was on a five-day visit to India, told a joint media interaction that he briefed the Indian prime minister “on the latest developments in the negotiations for a comprehensive settlement of the Cyprus problem, outlining the challenges we face and the stumbling blocks that inhibit further progress. I underlined our unwavering commitment to unify our country and its people in functional, viable federation in line with UN Security Council resolutions and EU law, values and principles,” he said. The discussions on the vexed Cyprus issue came ahead of Turkish President Recep Tayyip Erdogan’s visit to India from April 30. Turkey occupied the northern part of Cyprus in 1974.

For his part, Mr Modi said India has always stood with Cyprus on crucial issues and firmly supports its sovereignty, unity and territorial integrity. “I am aware of your initiative for resolving the Cyprus issue. You have led from the front in trying to bring a new era of peace, development and security. Not just for Cyprus, but for the whole region. We wish you every success in your efforts,” said the Indian prime minister. Mr Anastasiades responded by recording his sincere appreciation of his “dearest friend” Mr Modi and for India’s support on the Cyprus issue.

After the meeting between their leaders, the two sides signed four pacts, including one for air services and cooperation in merchant shipping, a key area of bilateral cooperation. Cyprus has the world’s second largest shipping industry and the Modi government has embarked on the port-led development as a key pillar of India’s economic progress.

Uniting against cross-border terror

The fight against terror was on top of the agenda of talks between Mr Modi and Mr Anastasiades as the two leaders strongly pitched for decisive action against states supporting, sheltering and sustaining “violence factories” in their regions, a veiled reference to terrorist outfits supported by Pakistan against the region. Mr Modi leader said that while India has been combating cross-border terrorism for decades, Cyprus, due to its geographical location, understood the threat posed by terrorism. Stressing the need for creating a comprehensive legal framework to fight terror, Mr Modi once again rooted for an early conclusion of the Comprehensive Convention on International Terrorism, proposed by India at the UN.

 

The two sides also agreed on the need for early reforms in the UN Security Council as Cyprus backed India’s bid for inclusion in the expanded world body as a permanent member and in the 48-nation Nuclear Suppliers Group which regulates civilian nuclear trade worldwide.

Issues like scaling up the growing economic ties between India and Cyprus figured during the talks. The Mediterranean country is the eighth largest investor in India. Last year, the two countries had revised the double taxation avoidance agreement. The Cypriot president said his country is supportive of the enhancement of the EU-India strategic partnership and backs an EU-India free trade agreement, which has been under negotiation for years. Mr Anastasiades invited Indian companies to invest in Cyprus, saying that this can help them gain an easy access to markets in Europe, the Gulf region and North Africa. Addressing a meeting of India-Cyprus Business Forum, Cypriot Finance Minister Harris Georgiades asked Indian investors to consider putting their money in sectors such as tourism and hospitality, wind energy and film production in Cyprus.

Trade between India and Cyprus amounted to about $110 million in 2015 and the former is the eighth largest investor to India with cumulative FDI of over $8.5 billion in sectors such as financial leasing, stock exchange, auto manufacture, manufacturing industries, real estate, cargo handling, construction, shipping and logistics. Cyprus had since long been considered a tax haven for companies to route their investments and India had blacklisted it as a non-cooperative country. But that changed last year when the two countries signed a revised treaty for avoidance of Double Taxation and the Prevention of Fiscal evasion (DTAA) with respect to taxes on income that will allow source-based taxation of capital gains on shares for investments after April 1, 2017. Since then, India has taken Cyprus off the black list.

(Pallab Bhattacharya contributed inputs for this article)

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