By Dorita Yiannakou and Panayiotis Rougalas
A fresh momentum is taking hold in Cyprus-India commercial relations, thanks to the free trade agreement recently finalized between the European Union and India. The deal promises lower tariffs on European products and smoother access to the vast Indian market.
Key sectors set to benefit include technology, services, defense, agriculture, and shipping, providing new opportunities for closer collaboration between Cypriot and Indian businesses.
Cyprus and India already enjoy strong diplomatic and business ties, which have encouraged Indian companies to establish a presence on the island. Within the framework of the India–Middle East–Europe Corridor (IMEC), Cyprus aims to serve as a gateway for Indian companies into the EU and the Middle East. Both countries’ business communities are eyeing mutual investments, particularly in digital innovation and hospitality. Other promising sectors for investment include defense technology, resource management, infrastructure, agriculture, film, and cybersecurity.
These ambitions were highlighted during Indian Prime Minister Narendra Modi’s visit to Cyprus last June, when a joint partnership declaration was signed. Cyprus President Nikos Christodoulides is set to visit India officially in May 2026, further cementing bilateral ties.
The Deal and Its Benefits
The agreement, expected to potentially double European goods exports by 2032, signals that Europe can diversify toward alternative markets. After nearly 20 years of piecemeal negotiations, this upgrade in EU-India trade relations underscores how commerce can serve as a stable foundation for renewed alliances and stronger economic partnerships.
According to Filokypros Rousounidis, Secretary General of the Cyprus Chamber of Commerce and Industry (KEVE), such agreements highlight the strategic importance of Cyprus’ positioning, connectivity with emerging markets, and active participation in European and regional economic initiatives. However, he notes, the success of the deal will depend on timely and effective implementation, translating ambition into tangible benefits for businesses, investments, and economic resilience. In an era of geopolitical tensions and rising protectionism, the deal reinforces the value of rule-based trade and reliable, long-term partnerships.
For Cyprus, the deal could open access to a market of 1.4 billion consumers, according to Giorgos Pantelidis, president of the Cyprus Employers & Industrialists Federation (OEB). Technology, services, and shipping are expected to be priority sectors for deepened cooperation, with enhanced connectivity helping to further develop business relations. The agreement also improves access for Cypriot products like pharmaceuticals, while allowing Indian goods into the Cypriot market.
Currently, Cypriot exports to India include iron, steel, aluminum, copper, and electrical equipment, while India supplies Cyprus with chemicals, pharmaceuticals, clothing, and food products. Bilateral trade totals roughly $150 million, with Cyprus ranking as the 8th largest source of foreign investment in India and India among the top ten foreign investors in Cyprus, a solid foundation for further expansion.
Indian Companies Establish a Footprint
The strong business ties are reflected in recent corporate moves: several major Indian companies set up operations in Cyprus in 2025.
Thomas Cook India opened its first office in Nicosia, offering a wide range of services, including currency exchange, corporate travel, conference and exhibition (MICE) services, and leisure travel.
LTI Mindtree, an Indian multinational IT services and consulting firm formed in 2022 through the merger of Larsen & Toubro Infotech and Mindtree, established a Cyprus base.
Drone Destination, a New Delhi-based company specializing in unmanned aerial vehicles (drones), aims to export drone components from Cyprus to Europe initially, and later to the Middle East, while also providing training and certification for operators.
Bcentriqe.ai, another Indian company, plans to expand to Cyprus, offering business profitability solutions and consulting services.
2026 is expected to be a milestone year for Cyprus-India relations, with planned visits, bilateral contacts, and a series of investment initiatives.
Tariff Cuts and Market Access
The agreement eliminates or reduces tariffs on 96.6% of EU goods exported to India, saving roughly €4 billion annually in tariffs. Wine duties will drop from 150% to 75% initially, then down to 20%, while olive oil tariffs fall from 45% to 0% within five years. The deal also covers automotive parts, chemicals, plastics, and industrial products, with the EU set to benefit from a quota of 250,000 vehicles annually under reduced duties, including 160,000 internal combustion engine vehicles and 90,000 electric vehicles. Auto parts tariffs will be eliminated within five to ten years.
EU Commission President Ursula von der Leyen stressed that sensitive European agricultural sectors will be protected, with products like beef, chicken, rice, and sugar excluded from the agreement. All Indian imports will continue to meet strict EU food safety standards.
Currently, EU-India trade exceeds €180 billion annually, supporting nearly 800,000 jobs in Europe.
Cyprus Seized the Opportunity Early
Cyprus recognized the potential of India as a trade and business partner early. The trade corridor between India and Europe naturally runs through Cyprus, with Cypriot banks playing a central role.
Eurobank, with Canadian fund Fairfax as a major shareholder, has signed agreements to invest in ERB Insurance, acquiring 45% of its shares, with the option to buy the remaining 55% later. Eurobank is also in the final stages of setting up a representative office in Mumbai.
Bank of Cyprus has established the IBU India Hub, aiming to attract Indian entrepreneurs to its portfolio. Both banks target large Indian enterprises seeking to relocate part of their operations to Cyprus, the nearest EU country they encounter.
*Read the Greek version here.
