Thursday, September 14 2006 14:30 Hrs (IST) - World Time -

Colombo: India and Sri Lanka are on track to record about three billion dollars in bilateral trade next year, Finance Minister P Chidambaram said here.

The two countries saw trade grow from 650 million dollars six years ago when the Indo-Lanka free trade deal was signed, to one billion dollars in 2002 and two billion dollars in 2005.

"At the rate trade is growing between the countries, I am confident that the three billion mark will be crossed some time in the next calendar year," Chidambaram told businessmen and delegates here.

Some Indian investments here have fallen below expectations, with Colombo still disputing and delaying subsidy payments to Indian Oil Corp's local unit Lanka IOC for selling fuel at government determined prices.

Attempts by a local business tycoon to take over the local arm of Indian healthcare giant Apollo Hospitals, has also raised a diplomatic and investment row.

Colombo has sided with the Indian firm saying special concessions given by the Board of Investments would be withdrawn if Apollo loses control of the hospital.

"On the issue of Apollo, the Government specifically, by name, invited this particular investor to come into this country and were given special incentives under the Board of Investment to generate that level of investment," Rohitha Bogollagama, Investment Promotion Minister said.

"Any investor under the BOI law will remain under BOI laws, the BOI regime has to be carefully understood. There cannot be a shifting of these parameters by any investor at his own will," he said.