Indian Prime Minister Narendra Modi yesterday extended India's support for reforms, reconciliation and progress in Sri Lanka when he met visiting Sri Lankan Prime Minister Ranil Wickremesinghe in New Delhi.

"As a close neighbour and friend, India wishes Sri Lanka every success and rejoice in your progress and assure our unwavering support," Prime Minister Modi told a joint news briefing last afternoon following the meeting.

He said Sri Lanka could achieve genuine reconciliation and development with the wisdom of its leadership and support of the people.

Prime Minister Wickremesinghe said his government would certainly look into devolving power and ensure that all Sri Lankans are equal within the Constitution. He said foreign Affairs Minister Mangala Samaraweera had briefed Mr. Modi about the developments at the UNHRC sessions in Geneva.

Both leaders said the two countries were likely to sign a permanent trade and economic agreement next year and had agreed to intensify talks on such an agreement and expedite its conclusion.

Mr Wickremesinghe and his Indian counterpart told journalists that both countries have agreed to cooperate with each other in strengthening bilateral ties especially in trade, economic affairs and extending them even to defence.

" We have been talking of economic and trade ties for a long time and it is important to compile a framework for agreement by the end of the year and then finalize it by early next year," Mr Wickremesinghe said.

Mr Modi said improvement of trade and economic relations were important to both countries. "We both need deeper Economic engagement.We both want to see our trade grow in a balanced manner. We discussed how we can achieve these goals in a more open and competitive Indian market, including through bilateral agreements for trade and investments." he said.

Mr. Modi said India would support the strengthening of connectivity between the two countries to deepen economic, human and economic links.

Indian Prime Minister also said steps will be taken by India to encourage its fishermen to encourage deep sea fishing and he had informed his counterpart on these measures

He said India would intensify its cooperation with Sri Lanka in combating terrorism and work together for security and stability in the Indian ocean.

"We will intensify cooperation with Sri Lanka in combating terrorism and work together for security and stability in our maritime neighborhood and Sri Lanka is our largest partner in the defence training programme and we will extend our cooperation in this area," he said.

Prime Minister Ranil Wickremasinghe in his response said Sri Lanka was also looking forward to working together with India and hoped to participate in joint operations in the Indian Ocean in the future.

Meanwhile, Sri Lanka signed several MoUs yesterday with India under which the Indian government will provide assistance worth some Rs.6 billion to Sri Lanka.

The most significant bilateral agreement signed between the two countries was the MoU to set up an Orbit Frequency Coordination of satellites for the South Asian region.

Among the other agreements signed were an MoU under which Indian government would construct a 200-bed hospital at an estimated cost of Rs.187 million in Vavuniya.

In another MoU, the Indian government would provide funds for small development projects under Rs.300 million covering infrastructure in education, health, community development, conservation of cultural heritage, environment, child and women welfare sectors. The total capital cost covered by the MoU is Rs.5 billion.

In addition India will provide assistance worth US$8 million for an ultra modern ambulance service. (Yohan Perera in New Delhi)