Sri Lanka expects the Economic and Technology Cooperation Agreement - the ETCA - with India to be signed by the end of 2016, and the deal is likely to be a game changer in the economic ties between the two countries, Sri Lanka's Prime Minister Ranil Wickramasinghe said on Friday.
"Prime Minister Modi and I have decided that we must conclude it (the ETCA) by the end of this year," Wickramasinghe said at the India Economic Summit.
Speaking about the importance of the agreement he said that the deal could transform trade between the two countries. India's five southern states - Karnataka, Tamil Nadu, Andhra Pradesh, Telangana and Kerala - together have a population of 350 million and a combined GDP of 450 billion dollars.
The addition of Sri Lanka, after the agreement, would bring another 22 million people and an 80 billion dollar economy into the regional trade system. Potentially, Mr Wickramasinghe said, trade in the "sub-region could be around 500 billion dollars".
"Just imagine if we work together," he said.
The trade agreement is expected to help Sri Lanka gain better access sot India's rapidly growing markets and provide a boost to its economy. He also said that he was optimistic that India-Sri Lanka Free Trade Agreement would be further expanded to go beyond trading in goods to cover trade in services, investments and technology cooperation also.