The two countries signed the revised India-Cyprus Double Taxation Avoidance Agreement in November, 2016.
"I believe with new taxation agreement, investment from both sides will increase," High Commissioner of Cyprus to India Demetrios A Theophylactou said on the sidelines of a Bengal Chamber of Commerce and Industry event.
However, investment from India is minimal in Cyprus, but Theophylactou is hopeful that sectors like tourism will be lucrative for Indian investors.
The diplomat also said Ayurveda could be another area for Indian investment in Cyprus.
"I had gone to Kerala... and I feel Indian ayurveda holds lot of potential in Cyprus," he said.