India and Sri Lanka are to sign an economic partnership agreement in March 2004, Sri Lankan Foreign Minister Tyronne Fernando said in Chennai on Tuesday.

He told reporters at the Meenambakkam airport that the India-Sri Lanka study group on the Comprehensive Economic Cooperation Agreement had submitted its report to the prime ministers of India and Sri Lanka on Monday.

He said both the countries would also sign a defence co-operation agreement, which would enable the Sri Lankan defence personnel to get trained in defence establishments in India.

"It is not a defence treaty, but only a co-operation agreement," he said.

Sri Lankan Prime Minister Ranil Wikremesinghe had wide-ranging bilateral discussions with his Indian counterpart A B Vajpayee and Deputy Prime Minister L K Advani, in New Delhi on Monday.

During the talks the Sri Lankan prime minister had apprised the Indian leaders of the latest in the peace process to solve the ethnic strife in the island republic.

LTTE would be presenting its counter-proposal to the Sri Lankan government on October 31, he said. 

The Indian government wanted a solution to the Sri Lankan Tamils problems within the framework of a unified Sri Lanka. LTTE had also accepted a federal set-up for Sri Lanka, he said, adding even an interim administrative arrangement had to be evolved on this basis.