Trincomalee

That included the potential for a petroleum pipeline from southern India to Sri Lanka and developing Trincomalee, a northeastern coastal city in Sri Lanka, into an industrial hub.

In October, Wickremesinghe - who took over as president in July after Rajapaksa quit - unveiled a blueprint for Trincomalee, which has a natural deep-water harbour, including a proposal to work with India to develop a strategic port there besides setting-up a new industrial zone and an energy hub, according to details released by his office.

Besides seeking Indian investments to set up renewable energy and power projects in the north of the island, Sri Lanka is also keen to work with New Delhi on expanding and developing the harbour at Trincomalee in the northeast into a major port, several officials said.

After the initial credit line by India was announced, both countries in January agreed to jointly operate 61 giant oil tanks built during World War II in the north-eastern Trincomalee harbour.

India also aims to develop a 100MW power plant near Trincomalee.