On the occasion of the 60th anniversary of India's independence, I have great pleasure in extending my warm greetings and best wishes to my fellow Indians and to the friendly Government and people of the Democratic Socialist Republic of Sri Lanka.

The six decades since independence has seen India mature into a vibrant democracy, an open and rapidly growing economy and a pluralist society. India today is not only the largest democracy in the world but also a testament that democracy can survive and indeed thrive even in pluralist society.

The economic reforms that began in 1991 unleashed India's competitive instincts, and its creativity. The success of process has given the country the confidence to increasingly embrace globalization. It started a process of economic transformation that continues to unfold. India is growing today at more than 9%, and more importantly, there is a strong expectation that this rate will be exceeded in the coming years. In April 2007, India joined the club of 10 countries with a trillion dollar economy. In purchasing power parity terms, India is today the third largest economy in the world.

Foreign Direct Investment in India in 2006-07 was close to US $ 16 billion increasing at the rate of 184% over the previous year. The trends for the first four months of calendar year 2007 would indicate that this rate of growth in investments is picking up further standing currently at 220%. India's foreign trade is growing at an average of 20% every year. Its services exports have been particularly striking, increasing nine fold since 1990. The purchasing power of Indian households has tripled even as its middle class has quadrupled in the last two decades. The social implications of the sustained growth in recent years are indicated in increase in longevity (from 32 to 65 in the last 60 years) and literacy (from 9% to 61% over the same period). During the each year over the past two decades, 1% of country's poor have crossed the poverty line.

Our sense of optimism, however, has to be balanced by the many of the challenges and problems that we continue to face. We are aware of our responsibility to make this growth process equitable and inclusive. As our Prime Minister has stated, "we must not lose sight of the fact that we have to sustain a much higher rate of investment, keep inflation under control, generate more employment, impart a new element of dynamism to our agriculture and wage a decisive war against poverty, ignorance and disease."

India's engagement with different countries and regions in the world have witnessed significant expansion in recent years. Our relationship with all the major powers, countries in our immediate and extended neighbourhood, and our partners in the developing world have seen considerable improvement. We continue to remain active participant in the UN and other international frameworks. Our Prime Minister participated in outreach meetings with the G-8 member countries at Heiligendamm in Germany in June 2007. India also has strengthened its institutional inter-linkages with economic groupings such as ASEAN, BIMSTEC, Mekong-Ganga Cooperation, IBSA, G-15, Indian Ocean Rim and the East Asia Summit. India has also played a significant role in the WTO and other international economic institutions.

In our immediate neighbourhood, we have attached great priority to our engagement within SAARC. At the 13th SAARC Summit held in New Delhi, where India assumed its Chairmanship, important decisions were taken to operationalise the SAARC Development Fund; establish the South Asian University; create a SAARC Food Bank; and designate 2008 as the "Year of Good Governance". With a view to take steps that will directly improve the lives of the people in South Asia, it was agreed among the leaders to make tangible progress within six months on four issues: water, energy, food and the environment. The leaders also called for quick implementation of the SAFTA to promote closer economic integration among SAARC countries. The summit also saw entry of Islamic Republic of Afghanistan into the SAARC and its inclusion as a rightful member of the SAARC fraternity. As our Prime Minister stated at the closing session of the 13th SAARC summit, "a new dawn is breaking out over South Asia and .......... we are all set to fulfil the promise and vision of SAARC."

Within the SAARC, India and Sri Lanka have developed a very special relationship. We attach high priority to our relations with Sri Lanka. We share a traditional bond of friendship that is rooted in history and in our common values. There is a broad national consensus in both countries that reflects the desire of our two peoples for close, cordial and friendly ties between the two countries. The institutional framework for the relationship is based on frequent contacts at the political level. President Mahinda Rajapaksa visited India for the SAARC summit in February 2007. Prime Minister Ratnasiri Wickramanayake visited India on January 28-30, 2007 to participate in the Satyagraha Conference in New Delhi and Foreign Minister Rohitha Bogollagama visited India on January 30-31, 2007 on his first foreign visit as Sri Lankan Foreign Minister. Earlier, our External Affairs Minister had visited Sri Lanka in January 2007.

India has an abiding interest in peace, stability and development in Sri Lanka that can enable realization of the vast potential that this country has for welfare and well being of its people. It will also enable Sri Lanka to benefit more from the ongoing growth and transformation taking place in the South Asian region and beyond.

India is committed to the unity, sovereignty and territorial integrity of Sri Lanka. It is also our view that the only solution to the ethnic problem is a negotiated, political settlement that is acceptable to all communities in Sri Lanka consistent with the principles of democracy, pluralism and human rights. We are in favour of making all possible efforts to revive the political dialogue in order to move the peace process further.

Our economic cooperation with Sri Lanka has been on the upswing ever since the signing of the India-Sri Lanka Free Trade Agreement (FTA) in 1998. The economic partnership between India and Sri Lanka is increasingly setting the benchmark for the South Asian region. Sri Lanka is India's largest trading partner in South Asia and our two-way investment relationship is also growing. Bilateral trade was US $ 2.3 billion in 2006 quadrupling since the entry into force of the FTA in 2000. The FTA has helped in giving a renewed impetus to bilateral trade, in narrowing the ratio of Sri Lankan exports to its imports from India, and contributed to increase in two way investments. India is the largest source of imports into Sri Lanka and the third largest export destination from Sri Lanka. In order to further expand and intensify these ties, India and Sri Lanka are currently negotiating a Comprehensive Economic Partnership Agreement (CEPA) that would expand our cooperation beyond trade in goods to include trade in services, stronger investment relationship, and wider economic cooperation and integration.

An important feature of our recent economic interaction has been the growth of two-way investment relationship. India is the third largest investor in Sri Lanka. Indian investments in Sri Lanka cover diverse sectors like petroleum retail, hospitals, telecom, vanaspati, copper and other metal industries real estate development, and banking. Some of the major Indian business houses and brand names have established successful operations in Sri Lanka. We believe that investments into Sri Lanka can be vastly expanded and the two governments are constantly working to create attractive conditions to realize this vast potential. A new but recent trend in our investment relationship has been the beginning of Sri Lankan investments into India. Main Sri Lankan investments in India include Ceylon Biscuits (Munchee brand), Carsons Cumberbatch (Carlsberg), Brandix, MAS Holdings, John Keels, Hayleys and Aitken Spence. We feel that this trend is very positive and one which needs to be encouraged as we strengthen our economic partnership.

India is also participating in infrastructure development in Sri Lanka. A line of credit of more than US $ 100 million has been extended for the refurbishment of the southern railway corridor from Colombo to Matara. NTPC Ltd. is exploring the setting up a 500 MW coal based thermal power plant as a joint venture with Ceylon Electricity Board. India and Sri Lanka are also working closely to develop the information and communication technology sector through a Joint Working Group which met for the first time in Colombo in October 2006. The two sides are exploring the possibility of setting up an ICT Park in Sri Lanka.

We need to support building of the human resource talent pool that has been the traditional strength of the two countries. The Government of India has instituted various scholarship and training programmes to strengthen this Human Resource pool. In order to support the e-Sri Lanka initiative, which is an integral part of President Mahinda Rajapaksa's vision for Sri Lanka, the Government of India is financing establishment of 20 Nanasalas at a cost of Sri Lankan rupees 13 million. The first of these Nanasalas were inaugurated in July 2007. The project will be completed in the second half of this year. In addition, scholarships are awarded annually to 100 Sri Lankan students each year under the Mahatma Gandhi Scholarship Scheme. Another set of 75 scholarships is awarded by the High Commission of India to Sri Lankan nationals for pursuing undergraduate and postgraduate courses in various reputed institutes and universities in India. The Indian Cultural Centre in Colombo awards about 5-10 scholarships to Sri Lankan students to follow undergraduate courses in music, dance and fine arts. There are also schemes of technical cooperation such as ITEC, BIMSTEC and Colombo Plan, under which the Government of India provides 150 slots each year for pursuing professional short and medium courses in India. To assist in capacity building in agriculture, there are training programmes, scholarships, research projects and exchange of visits of farmers.

Close people to people contacts between our two countries is reflected in close cultural links between, the roots of which go back to ages. The enormous interest that emanates from our traditional links translated into setting up of the Indian Cultural Centre in Colombo in July 1998. The Centre organizes around 6 cultural performances, both Sri Lankan and Indian, every month. Screening of films, book launches, organizing workshops and exhibition and offering language and fine arts courses are some of its other activities.

We have planned an exhibition of Mahatma Gandhi to be opened in Colombo and other parts of Sri Lanka in early September 2007 and Odissi dance recital during the independence day celebrations in Colombo and Kandy in August this year.

Another aspect of people-to-people contacts is reflected in growth in tourism between the two countries, both for leisure and pilgrimage. The tourist arrivals in Sri Lanka from India was the highest reaching about 1.28 lacs in 2006. Sri Lankans going to India similarly is on the rise. The connectivity between the two countries has also dramatically improved in recent years with more than 125 flights every week between India and Sri Lanka.

Much has been achieved between India and Sri Lanka in recent years. But potential is greater still. As Prime Minister Indira Gandhi has said in 1967, "there is a vast field for cooperation in this exciting task of building our respective countries. We have much to learn from each other and we cannot but gain by cooperating with each other."

This objective of cooperation for mutual benefit would receive a major boost if there is peace and stability in Sri Lanka and the region. Linked by geography, and cultural and historical links, we feel that our destinies are inevitably entwined. We stand alongside Sri Lanka as she seeks to find a just, enduring and equitable solution to her problems. We wish the Government and people of Sri Lanka a soonest return to the path of peace, development and prosperity.