India expects to finalise a free trade agreement with the European Union by the end of this year, Prime Minister Narendra Modi said on Monday, while Cyprus, which assumes the EU presidency in 2026, said better ties would be its priority.

Modi, on an official visit, said there were unlimited possibilities in expanding economic ties with Cyprus in a visit aimed at pushing forward India’s global trade agenda.

“We are working on finalising a mutually beneficial India-EU trade agreement by the end of this year,” Modi said in joint remarks with Cypriot President Nikos Christodoulides.

India is pursuing a trade link by sea and rail known as the India-Middle East-Europe Corridor (IMEC), but the visit is being held in the shadow of an escalating crisis in the Middle East.

“We agree the India – Middle East Europe Corridor will pave the way for peace and prosperity in the region,” Modi said.

Cyprus, which has close relations with India through its shared membership of the Commonwealth, is offering facilities to be a first point of entry to Europe and a transhipment hub, Christodoulides said.

“A strengthening of EU-India relations will be among the priorities of the Cypriot EU presidency,” Christodoulides said. Cyprus assumes the rotating six-month presidency of the bloc in early 2026.

“Your visit reflects the clear political will to further strengthen our bilateral relations in a variety of areas, from economy, trade, defence and security, technology, tourism and connectivity,” he said.

Modi announced that a “roadmap” for the next five years would be prepared to strengthen their cooperation in defence and security.

“With today’s landmark visit of the Prime Minister of India, the cooperation between Cyprus and India is fuelled by a new dynamic of strategic value and importance” Christodoulides said.

The two leaders reaffirmed their commitment to closer ties by signing a joint declaration on a “comprehensive partnership”, aimed at deepening cooperation across trade, security, and strategic interests.

The joint statement, outlined in ten bullet points, reaffirmed the shared values of Cyprus and India, including their commitment to sovereignty, peace, crisis management, regional cooperation, and strategic engagement.

“Cyprus and India share a strategic vision of serving as bridges between regions,” the declaration read, underscoring the important role of the India-Middle East-Europe Economic Corridor (IMEC).

Christodoulides emphasised Cyprus’ role as a “gateway into Europe” and welcomed its potential to serve as a regional hub for transshipment, encouraging Indian shipping companies to establish a presence on the island.

Both sides expressed readiness to support the conclusion of the EU-India Free Trade Agreement by the end of this year recognising its significant economic and strategic potential.

Christodoulides reaffirmed Cyprus’ commitment to stand as a “predictable and secure ally” of India, particularly in regard to geostrategic interests in the Eastern Mediterranean and the Middle East.

The president emphasised Cyprus’ support for India’s efforts to counter international and cross-border terrorism, stressing that Cyprus aimed to further strengthen India’s strategic relations with the EU as part its upcoming European Council presidency.

Christodoulides then honoured Modi with the highest distinction of Cyprus, the Grand Cross of the Order of Makarios III, for which Modi expressed his gratitude.

“I dedicate it to the friendly relations between India and Cyprus, to our common values and to deep mutual respect and understanding,” he said.

Modi described the medal as a symbol of a commitment to peace, security, sovereignty, territorial integrity and the wellbeing of both peoples, expressing his confidence that bilateral cooperation would reach “even higher levels in the future”.

Modi’s visit to Cyprus began on Sunday when both leaders participated in a roundtable discussion with business leaders in Limassol, where Christodoulides highlighted that Cyprus is the eighth largest source of foreign investment in India, which ranked among the top ten investors in Cyprus.

Modi described Cyprus as “a long-standing, reliable partner of India”, noting that bilateral trade had reached $150 million, stressing that “the real potential of our relations is much greater”.

That same day, the Cyprus Chamber of Commerce and Industry (Keve) and Invest Cyprus hosted the Limassol Business Forum, bringing together Indian and Cypriot stakeholders to explore joint ventures and investment opportunities.

Modi’s visit marks the first by an Indian prime minister to Cyprus in 23 years.