India and Cyprus today said the recent revision of tax agreement between them will strengthen their economic ties and boost investment flows.
India and Cyprus today said the recent revision of tax agreement between them will strengthen their economic ties and boost investment flows.
Cyprus is the eighth largest country for India in terms of FDI inflows, having pumped in over USD 9 billion between 2000 and 2016.
The bilateral trade is at about USD 110 million.
"I understand that the pending issue of revision of the double taxation avoidance agreement (DTAA) has been resolved and the long-pending request of notified jurisdiction area has been accommodated," Minister of State for Finance Arjun Ram Meghwal said at the India-Cyprus business session.
This will pave the way for Cyprus to invest more in India, not just in portfolio investment, but in key segments like manufacturing and other sectors, he said.
India had blacklisted Cyprus in 2013 for not sharing tax information earlier. Following the tax treaty last November, the capital gains tax will be applicable on sale of shares on investments made after April 1, 2017 bringing Cyprus at par with Mauritius in terms of tax treatment.
This has provided big relief to the investors and Indian companies which have raised capital from Cyprus investors.
Cyprus President Nicos Anastasiades was also optimistic that the recently-signed DTAA will help cement economic ties, especially in the investment field.
He pitched Cyprus as one of the fastest-growing European nations that provides investment opportunities in various sectors.
"I would encourage foreign investors, including Indian investors, to invest in projects in Cyprus, which the Presidency can promote through its fast track mechanism for receiving the relevant licenses within short and specific timeframes," he said.
To promote investment and bolster ties, both the countries will sign a number of bilateral agreements during the president's 5-day trip, which ends on April 29.
"A number of bilateral agreements and Memoranda of Understanding will be signed in the fields of Merchant Shipping, Air Services, Agricultural Co-operation, education and culture. I believe that these areas of co-operation are some of those that have the potential to significantly boost our economic and commercial exchanges," he said.
A Protocol on Air Services Agreement to be signed can pave the way for establishing direct connectivity between the two countries; thus increasing the so far very modest number of tourism exchanges if one considers the potential that this sector holds, he said.
Meghwal talked of tourism and film production as possible avenues for joint exploration of investment opportunities.
Besides, he said, setting of the International Solar Alliance could be mutually beneficial.
Seeking investments in India, Meghwal said rating agencies post demonetisation have predicted that India's GDP could cross double digits by 2020.
"India has undertaken many reforms and we are planning to introduce GST from July 1...will go down in history as the year of economic reforms," he said.
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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