President Pratibha Patil arrived in Nicosia, capital of the tiny Mediterranean island of Cyprus, on Thursday night on a two-day state visit focussed on trade and business.
The Indian Presidential visit commenced on Friday with a meeting at the Cyprus Chamber of Commerce where two Cyprus companies, NORASCO and Upturn Trading Limited (Owners of Dalco brand), signed a Memorandum of Understanding with India’s CASE Neuberg Solutions for setting up turnkey solar energy plants. Cyprus is a leading country in the field of research and implementation of solar power.
Under the MoU, which envisages investments to the tune of € 50 million (about Rs. 350 crore): The two Cyprus companies will supply solar photovoltaic (PV) systems, kits and technology while project finance and investments will be the responsibility of NORASCO. CASE will be the technology and engineering partner.
However, after the speeches were read and both sides had paid copious compliments to each other, the real issues between the two countries came up. From the Indian side Vimal Mahendru, head of the Presidential business delegation, pointed out that bilateral trade at $193 million in 2007-08 was “abysmally low,” and the basket of products traded was inadequate. The overall business environment, he said, was not encouraging and this despite foreign direct investment of $600 million from Cyprus in April-July 2009, accounting for 3 per cent of the total FDI coming into India during this period.
Mr. Mahendru asked for a “commercial officer/executive” in the High Commission of Cyprus in New Delhi to realise the unexplored potential for bilateral trade and business. From the viewpoint of Cyprus, the sticking point in bettering business relations was a proposed Indian amendment to the double taxation regime now in force. The Cyprus side argued that the amendment, which envisaged taxing capital gains, would vitiate the business environment between the two countries.