Sri Lanka’s Prime Minister Ranil Wickremesinghe shakes hands with his Indian counterpart Narendra Modi during a photo opportunity before their meeting in New Delhi yesterday. Wickremesinghe is on a three-day official visit to India.

Reuters/New Delhi

Sri Lanka hopes to hammer out an economic partnership deal with India this year, its prime minister said yesterday, 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 co-operation 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 Rajapakse, 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 $2trn economy could dominate that of Sri Lanka, with a gross domestic product of just $75bn, 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 $3.64bn in 2013, the last year for which figures were available from the government. Of that, India’s exports to the island were $3.09bn while it imported $543mn worth of goods from Sri Lanka.