New Delhi, Jun 10 (IANS): India and Sri Lanka have agreed to intensify talks on a comprehensive trade pact which will be a step forward from the current free trade agreement.

This decision was mentioned in the India-Sri Lanka joint declaration released Wednesday after the meeting of Indian Prime Minister Manmohan Singh with visiting Sri Lankan President Mahinda Rajapaksa.

"They agreed that it would be timely to build on this achievement through a more comprehensive framework of economic cooperation, best suited to the two countries," said the declaration.

The proposed Comprehensive Economic Partnership Agreement (CEPA) has been in the pipeline for over two years, but it has not moved forward.

"In this context, they directed the concerned officials of the two countries to hold intensive consultations towards developing a framework for sustainable economic partnership between the two countries and addressing outstanding issues," said the document.

Besides, a CEOs' forum will be launched "to involve the public and private sectors in a dialogue to generate ideas to deepen and broaden the bilateral economic relationship in all its aspects and to help chart the future course of business and trade interaction between the two countries".

There was also emphasis on closer economic integration between the two South Asian countries to improve the lives of their peoples.

"In this context, they agreed to cooperate closely to nurture a favourable environment to forge closer economic and trade linkages," added the declaration.

India had signed its first ever Free Trade Agreement with Sri Lanka in 1998 that came into force March 1, 2000.

"Recognising the considerable benefits from greater economic cooperation between the two countries, the two Leaders noted the progress achieved under the India-Sri Lanka Free Trade Agreement," it said.

Since the signing of FTA, trade has moved rapidly, calculated at $2.02 billion in 2009. India is also the fourth largest investor in Sri Lanka.