The Sri Lankan government's efforts to drum up more foreign investment may get a boost as Suzuki has indicated it is looking into setting up a factory in the country.

Suzuki could invest up to $25m in a new car assembly plant in Sri Lanka.

Commerce minister Ravi Karunanayake said Suzuki had made the decision "in principle" and would now be sending a team to the country to inspect the location.

The Sri Lankan government has been trying to attract more foreign investment, encouraged by planned peace talks with separatist Tamil Tigers aimed at ending a 19-year civil war.

"Trainable workforce"

Sheran Fernando from Brown and Company - Suzuki's local agent in Sri Lanka - told the BBC's World Business Report both Mazda and Fiat have tried to assemble cars in Sri Lanka in the past but found that the local market was not large enough to sustain their operations.

Now growth in local demand and increased trade within the south Asia region have made Sri Lanka more attractive for car manufacturers, he said.

Mr Fernando added the quality of the Sri Lanka's workforce also made it competitive with other countries in the region.

"We don't necessarily have the cheapest workforce but in terms of ease to train, ability to adapt to modern working conditions, modern working regulations - we have a literacy rate of something in the region of 90% - so the quality of our labour is very high," he said.