India will invest up to $2 billion in Sri Lanka over the next four years in a variety of sectors including real estate, energy and infrastructure, visiting Indian Commerce Minister Nirmala Sitharaman said on Tuesday.
"In the next two to four years, the total investment interests will rise to $2 billion," Sitharaman told reporters here at the end of her three-day visit to the island nation.
India is Sri Lanka’s largest trading partner and both countries are considering a broader bilateral trade agreement.
After meeting here with Sri Lankan Minister of international Trade Malik Samarawickrema and other officials, Sitharaman said that Sri Lanka’s decision to scrap a joint venture coal power plant project will not deter India’s future investment plans in the country.
"India understands Sri Lanka’s need to move from coal power to more renewable power generation sources," she told reporters.
The proposed Economic and Technological Cooperation Agreement (ETCA) and issues concerning the existing free trade agreement (FTA) between India and Sri Lanka were discussed in these talks.
"We have been meeting the business chambers to assess their concerns," she said referring to her discussions.
Samarawickrema said the ETCA is expected to open up a market of 1.25 billion people in India.
Both ministers said the negotiations on ETCA were reaching the final stage and both sides want to see it happening "as soon as possible".
"It was noted that the second round of negotiations for the ETCA is scheduled to take place in New Delhi on September 29-30, 2016," the Indian finance ministry said in a release from New Delhi.