India and Cyprus Expand Cooperation in AI, Fintech and Defence

Prime Minister Narendra Modi and Nikos Christodoulides have reaffirmed their commitment to unlocking the untapped economic potential between India and Cyprus, with a strong focus on technology, fintech, innovation and strategic cooperation.

During delegation-level talks, both leaders agreed to elevate bilateral relations to the level of a strategic partnership, signalling a major expansion in economic, technological and geopolitical engagement between the two countries.

In their joint statement, the leaders encouraged businesses from both countries to explore investments and trade opportunities in sectors including financial services, maritime connectivity, logistics, clean energy, waste management, space, science and technology, research and innovation.

The two sides also highlighted the opportunities expected to emerge from the India-European Union Free Trade Agreement (FTA) concluded earlier this year, which is likely to improve trade flows and investment cooperation between India and European markets.

The growing emphasis on digital and financial connectivity featured prominently in the discussions. The leaders said fintech partnerships could strengthen both cross-border transactions and broader economic linkages between the two nations.

How will UPI and fintech connectivity deepen India-Cyprus ties?

One of the key developments during the visit was the push to strengthen financial connectivity through digital payment integration and banking cooperation.

The leaders noted the deepening engagement in the financial sector, including the Memorandum of Understanding signed in 2025 between NPCI International Payments Limited and Eurobank Cyprus.

Both countries also welcomed the framework for interoperability between India’s Unified Payments Interface and the Target Instant Payment Settlement System operated by the European Central Bank. The initiative is expected to facilitate seamless cross-border payments for tourists, businesses and investors.

The two sides also welcomed the establishment of the India-Greece-Cyprus Business and Investment Council, which is expected to strengthen business-to-business partnerships and improve regional investment flows.

Building on the momentum generated by the India-Cyprus investors’ roundtable held in Limassol in 2025, an India-Cyprus Business Forum was also organised in Mumbai during the visit. Several business-to-business agreements were signed on the sidelines of the forum.

The countries further agreed to expand collaboration between startups, incubators, venture capital ecosystems and innovation networks.

In this context, both sides welcomed the signing of an MoU on Innovation and Technology, aimed at facilitating exchanges between startups, accelerators and innovation agencies in India and Cyprus.

Why are defence, maritime and technology cooperation becoming central to the relationship?

India and Cyprus signed a wide range of agreements covering counterterrorism, defence, maritime security, higher education, cultural cooperation and digital technology.

Briefing the media after the talks, Sibi George said, “This visit is an important milestone in India-Cyprus relations, as the two leaders have decided to elevate the bilateral relations to the level of strategic partnership.”

Among the major agreements was an MoU establishing a Joint Working Group on Counterterrorism. The two countries also signed agreements related to diplomatic training cooperation between the Sushma Swaraj Institute of Foreign Service and Cyprus’ Diplomatic Academy.

Additional agreements were signed on higher education, research cooperation and cultural collaboration.

George said India and Cyprus had also concluded an MoU on innovation and technology cooperation between Cyprus’ Ministry of Research, Innovation and Digital Policy and India’s Ministry of Electronics and Information Technology.

“Technology, innovation, AI, and space are also important areas on which discussions were held today,” he said, adding that both countries were looking at “substantial collaborations including on cyber resilience, capacity building and secure digital ecosystems.”

The two nations also signed a technical arrangement on Search and Rescue cooperation in maritime matters, reflecting the growing strategic significance of maritime trade and connectivity.

The leaders stressed the importance of Cyprus as a gateway to Europe and discussed the possibility of using the country as a regional hub for transshipment, storage, logistics and distribution.

Recognising the growing importance of defence ties, India and Cyprus agreed on a roadmap for bilateral defence cooperation for the period 2026-2031.

“Defence and maritime has emerged as a very important pillar in our engagement, which was reiterated today in the meetings,” George said.

He added that the defence cooperation programme signed earlier in Nicosia provides “a structured framework for furthering our defence partnership.”

The two countries also announced the establishment of a Cyber Security Dialogue and a Consular Dialogue to deepen institutional coordination.

Cyprus additionally joined the Indo-Pacific Oceans Initiative and will co-chair the Trade Connectivity and Maritime Transport pillar under the initiative.

George also highlighted the growing financial cooperation between the two countries, noting that an MoU between the NSE International Exchange at GIFT City and the Cyprus Stock Exchange would create “a framework for capital market cooperation.”

“Another important area of cooperation is in financial connectivity, which is gaining traction,” he said.

The senior MEA official also pointed to several business agreements signed during the visit involving Federation of Indian Chambers of Commerce and Industry, Confederation of Indian Industry and Cypriot industry bodies, as well as defence and space manufacturing partnerships.

The Institute of Chartered Accountants of India also signed an agreement with its Cypriot counterpart.

Highlighting the economic importance of Cyprus for India, George said, “Cyprus is the ninth largest source of FDI inflows to India and the second largest in the EU after Netherlands,” adding that cumulative FDI inflows from Cyprus into India have reached nearly USD 16 billion since 2000.

According to him, Cypriot investments in India span sectors including services, software and hardware, automobile manufacturing, construction, shipping and pharmaceuticals.

(With inputs from ANI)