India and Sri Lanka are expected to sign a new economic agreement next year covering both goods and services, said Minister of Investment Promotion Navin Dissanayake, the IANS reported today.

Discussions are expected to iron out differences, paving the way for the signing of an expanded Comprehensive Economic Partnership Agreement before 2011, said the minister.

He, however, noted that Sri Lankan business groups were worried over Indian dominance in the services sector.

At a seminar organised by the Confederation of Indian Industry in Mumbai, the Minister made a strong pitch for Indian industry to come to Sri Lanka.

“It is profitable in your own self-interest to invest in Sri Lanka,” the Minister said.

He noted that the global recession had left China and India relatively unscathed, but still the effects continued to linger.

“It is even more difficult for me to make this appeal to you in such circumstances. That’s why I decided to talk to your sense of business entrepreneurship; to your sense of business adventure coupled with self-interest,” said Minister Dissanayake.

Speaking at the occassion Sri Lankan High Commissioner to India C.R. Jayasinghe said due to the free trade agreement signed between the countries, bilateral trade volume had gone up from $600 million to $3.2 billion last year.