L.R.Jegadheesan BBC Correspondent in Delhi

During the visit, he will co-chair the Sixth meeting of the India-Sri Lanka Joint Commission along with Sri Lankan Foreign Minister Lakshman Kadirkamar.

He will also meet Sri Lankan President Chandrika Kumarathunga, Prime Minister Mahinda Rajapakshe and leaders of political parties.

India-Sri Lanka relations have seen significant progress since the last meeting of the Joint Commission held in 2003, Indian Foreign Ministry said in a statement.

"Political relations are close, trade and investments have increased, infrastructural linkages are expanding, defence cooperation is under discussion and there is a general, broad-based improvement across all sectors of bilateral cooperation", the statement added.

Trade Talks

Analysts say Natwar Singh will be discussing economic, political and defence cooperation between India and Sri Lanka.

Indian role in the tsunami reconstruction in the Island nation and Tamil Tigers (LTTE) related security issues are also expected to be discussed.

Reacting to reports that the LTTE had secretly built up air capabilities, in a recent interview Natwar Sigh had said that India was "concerned about LTTE having built an airstrip and having two aircraft and there's news about more coming."

Describing the India-Sri Lanka Free Trade Agreement as a success, Indian statement said that, "bilateral trade has more than doubled after the FTA was signed and exceeded US$ 1.8 billion in 2003-04. India was the largest investor in Sri Lanka in 2002 and 2003".

Both countries have agreed to finalise their discussions on a Comprehensive Economic Partnership Agreement by the end of 2005.

Indian Investments

Discussions are also underway between the two countries on major Indian investments in the power sector, in development of road and rail infrastructure and in energy.

India has committed a total of US$ 381 million as credit lines to Sri Lanka for financing a variety of economically important activities in Sri Lanka.

In addition, India had announced a Rs. 100 crore composite Tsunami relief package for Sri Lanka on December 26, 2004. Indian assistance in Sri Lanka's "Rebuilding the Nation Programme" is continuing, Indian statement said.

Natwar Singh is visiting Sri Lanka at a time when the Island's nation's political divisions are getting sharpened over the proposed Joint Tsunami Reconstruction Mechanism between Sri Lankan government and the Tamil Tiger rebels (LTTE).

Joint Mechanism

While Chandrika Kumarathunga wants to set up the joint mechanism, a key coalition ally of her government JVP is opposing it.

The party even threatened to quit the government if she implemented it. Powerful Buddhist monks are also opposing the move and one of them is on a fast unto death opposing it.

During Kumaratunga's recent visit to India, Indian government supported her efforts to establish the Tsunami joint mechanism.

Since India had banned LTTE as a terrorist outfit following the assassination of former Indian Prime Minister Rajiv Gandhi by a suspected LTTE suicide bomber, India's indirect support to the joint mechanism was seen as an important endorsement of Chandrika's move.