India and Cyprus have had long standing cordial relations at the political level, yet at people-to-people level, the interaction has not been as ambitious. Why is there a rather limited movement of Indian visitors for leisure or business to Cyprus?
Indeed, political ties have been quite strong and cooperation – particularly in multi-lateral fora – exceptional. We very much aim at strengthening bilateral ties even further; this entails settling the soonest possible an outstanding issue of a rather economic nature, which also has a bearing on our collaboration in the context of international organizations. We are optimistic that it will be resolved. The level of ambition can then be elevated. As for people-to-people exchanges, though we certainly have had interactions throughout the years, including with Indian students attending Cyprus universities or colleges, with medical professionals collaborating in respective specialized fields, as well as tourists visiting both countries, we believe the scope of people-to-people ties can be enormously extended and expanded. This requires more effort on both sides. Cyprus can promote itself rigorously in India, both as an investment and tourism destination, and vice versa. At the same time, we can create the necessary conditions so that young people, scientists, academics and NGOs can work closer together. There is a mutual interest in doing so; therefore it is our objective to assist in that direction.
Has the Cyprus-India Business Association, established in 2005, been successful in making a dent in trade? The trade volume has shown a decline, from $84.2 million in 2011-12 to $73.9 million in 2014-15.
The Cyprus-Indian Business Association, which is already in existence for more than a decade, aims at the qualitative boosting of business activities. It functions like a bridge, so to speak, in order to link Cyprus and India not only in terms of doing business together but in promoting economic collaboration, cultural exchanges as well as people-to-people changes. Again, in order to the Association to achieve its full potential, more concerted effort is needed on both ends. As a High Commissioner, I do have a rather ambitious goal to this end: boosting activities in the framework of the Association to new and high levels. Again, moving on with respect to a couple of pending issues will create the necessary space to realising this goal. And I am confident we shall collectively achieve that as both sides stand to benefit enormously. I would like to add that, besides the people who comprise the Association – in Delhi and Nicosia – I am particularly happy that there is also a very willing, enthusiastic and competent counterpart in Cyprus, namely the Indian High Commissioner in Cyprus, Mr. Ravi Bangar, with whom I have had a most fruitful collaboration thus far.
Amongst the initiatives planned in the context of the Cyprus-Indian Business Association are reciprocal visits of trade delegations, particularly with a view to promoting collaboration in those sectors where both sides are keen on engaging with international partners as they are considered priority areas as part of sustainable economic development, notably energy efficiency and renewable energy. There is ample scope of mutually beneficial partnerships and synergies that will materialize, inter alia, though visits of reciprocal trade delegations, mainly as part of reciprocal high level visits. Indeed, we very much hope that a state visit will take place the soonest possible, this time the President of Cyprus paying an official visit to India, once the necessary deliverables are in place and no pending issues remaining unresolved.
In this regards, I would like to recall that, in the early years of it existence, the Association undertook several initiatives, such as formal dinners on the sidelines of a state visit by the Cyprus President, a seminar in Cyprus entitled ‘Doing Business in India’, attended by a large number of entrepreneurs and professionals from both countries. Such activities help boost bilateral trade and economic relations.
In brief, it is my strong conviction that India can develop into a great business partner of Cyprus. Since our accession to the European Union, the interest of Indian entrepreneurs in Cyprus has increased tremendously. The common objective should be to facilitate interactions at the economic level, by creating an enabling environment whereby the mutual benefits would multiply exponentially and bilateral ties would grow even stronger.
What are the major items – exports from India to Cyprus and vice versa – that have been affected in the past five years? Do you see customs tariffs affecting trade?
There are no particular items of major concern that were seriously affected, one way or another, nor are customs tariffs in particular to blame. Notwithstanding, a possible Free Trade Agreement between India and the EU would undoubtedly help boost trade to India and vice versa. On the other hand, insofar as the service sector is concerned and specifically the part that concerns offshore activity – and I mean Indian offshore companies functioning in Cyprus – that has been affected mainly as a consequence of the aforementioned pending issue.
The MEA backgrounder says Cyprus is the 7th largest FDI investor in India with cumulative inflows in the past 15 years standing at $8.06 billion. If that is the case, why is the trade index at a relatively low rating? How do you see the FDI growth?
As I mentioned earlier, the trade index is relatively low compared to FDI because trade per se was never a sector where the two countries relied heavily. Cyprus used its comparative advantages as a shipping and financial centre; hence the bulk of investment was directed toward these sectors – then often reinvested to the country of origin. This is almost standard practice everywhere. What is worth noting is that, after the economic recession in early 2013, efforts are underway to unleash the economic potential that both traditional and new sectors possess, such as agriculture, agro-tourism, light manufacturing, solar energy and natural gas exploration, whereby trade volumes are expected to increase exponentially.
The fact that Cyprus stands at 7th position in FDI is little known among the business community; why has Cyprus been somehow silent about its investments? Business delegations are not so frequent, what do you attribute this to?
The volume of Cypriot FDI into India should not be a surprise. International investors have historically used Cyprus as a jurisdiction of choice for large cross-border investments. The legal, corporate and financial structuring options available in Cyprus offer advantages that most other jurisdictions simply do not have.
Cypriot FDI into India has been concentrated among a small number of private sector groups that tend to focus on project specific investments. Such investors often compete with each other for opportunities and would naturally seek to avoid widespread publicity of what they are looking to invest into.
Having said this, there are a number of ways that Cyprus and India could work together to increase the flow of cross-border investments between our two countries. The first of these should be a well-orchestrated awareness campaign that highlights the advantages Cyprus offers to FDI into India, as well as for Indian businesses seeking opportunities in the West. Cyprus, for example, offers Indian businesses and investors a unique point of access to lucrative markets in the EU, Russia and the CIS Countries. In additional, growing political and economic ties are being forged between Cyprus, Israel and Egypt that offer access to a wide variety of emerging commercial and investment opportunities in our Region.
From the diplomatic perspective, Cyprus and India could further encourage commercial delegations with the objective of educating both the public and private sectors on mutual advantages, as well as fostering commercial relationships that might otherwise not develop.
At a time when India is proposing smart cities, is Cypriot FDI aiming at bidding in this sector?
I have no doubt that investors will be watching the Smart Cities initiative closely in the hopes of identifying opportunities. Not only do Cyprus-based investors seek out just such opportunities, but Cyprus is home to a number of international construction companies that have developed industry leading experience in large, mixed use communities. Much of this experience has come from participation in the mega-projects made so famous in the GCC. There may be Cypriot firms that do engage in these bids.
But this initiative is also of interest from Public Sector perspective. Much of the benefit from the Smart Cities initiative will be felt in terms of meaningful employment, the development of technological solutions from SMEs and the longer-term economic diversification that so many activities will create. Such benefits are also sought in our Region.
In spite of the fact that Cyprus is the third largest and third most populous island in the Mediterranean, Indian business are not fully aware of the strategic location and the benefits accorded to investors in Cyprus. Why?
Yes, this is true. Cyprus has been something of a well-kept secret among the international business community.
As a country, Cyprus is often lost in the shadow of the larger nations in our neighborhood of the Eastern Mediterranean. And certainly, it is a tough neighborhood. International Press reports on the economic crisis in Greece, two recent revolutions in Egypt and the emerging security situation in Turkey also offer a number of distractions from the reality on the ground.
Taking a closer look at Cyprus reveals a number of facts that often surprise and quickly persuade international investors and businesses to make use of the Island in a variety of ways. For example, as a democratic EU State with strong, cohesive social structures, Cyprus has the political and social stability that is often missing in this part of the world. In addition, Cyprus enjoys a legal and corporate system based upon English Common-law, with the English language almost universally spoken in both boardrooms and on the street.
These are aspects of doing business that Indian investors and businesses would find more familiar than, let’s say, The Netherlands (where quite a few Indian investors presently conduct their EU and international business).
The number of Indian students has decreased in spite of the fact that Cyprus is part of the EU. What are the reasons?
What I know is that foreign student enrollment in Cypriot universities is definitely increasing. There are a number of factors that may affect the demographics within student populations from year to year. Certainly, Cypriot universities are in competition with those from other countries, and each year the budgets for marketing and reaching out change dramatically. So, why there are fewer Indian students in Cypriot universities recently must be viewed from all of these angles.
Having said that, Cyprus and India could certainly benefit mutually from an increasing trend in student exchanges. For one thing, the level of academic offerings in Cyprus is growing, with medical schools, scientific facilities and environmental research being a strong focus in the past few years. Cypriot students in India, and Indian students in Cyprus could only strengthen each of our countries socially, politically and economically.
Perhaps we could increase the awareness of academic exchange between Cyprus and India. That would certainly be a benefit to us both.