Sri Lanka hopes to set terms of economic pact with India by year end

NEW DELHI, Sept 15 (Reuters) - Sri Lanka hopes to hammer out
an economic partnership deal with India this year, its prime
minister said on Tuesday, seeking to strengthen the Indian Ocean
island's ties with its big neighbour and reduce its dependency
on Chinese investment.
Prime Minister Ranil Wickremesinghe, visiting New Delhi on
his first visit abroad since winning a general election last
month, said voters had given his government of national unity a
mandate for trade and investment with India.
"We are looking at a permanent agreement on cooperation on
economic affairs - trade, investment and technology - which is
essential for development," Wickremesinghe told reporters after
meeting Indian Prime Minister Narendra Modi.
Last month's poll win was the second shoe to drop in an
electoral cycle that began in January with reformist President
Maithripala Sirisena's defeat of Mahinda Rajapaksa, the
nationalist leader who crushed an insurgency by ethnic Tamil
rebels in 2009 and attracted billions of dollars in Chinese
investment.
Modi, since gaining power in May 2014, has embarked on an
active neighbourhood policy in South Asia, seeking to revive
ties that were long clouded by India's sympathy with Sri Lanka's
Tamil community during the civil war.
Modi addressed fears that India's $2 trillion economy could
dominate that of Sri Lanka, with a gross domestic product of
just $75 billion, by saying that he would like bilateral trade
to grow and become more balanced.
"We both want deeper economic engagement," Modi said. He
added that Indian businesses were keen to invest in Sri Lanka's
infrastructure, energy and transport sectors.
Wickremesinghe said he hoped a framework economic
cooperation agreement could be agreed in principle by the end of
this year and to have final agreements "in place" by mid-2016.
Bilateral trade touched $3.64 billion in 2013, the last year
for which figures were available from the government. Of that,
India's exports to the island were $3.09 billion while it
imported $543 million worth of goods from Sri Lanka.