He said Sri Lanka has the potential to be India's "strongest economic partner" in the region and his government would try to boost bilateral trade and make it more balanced.
Addressing Sri Lanka's business community at the Ceylon Chamber of Commerce, Modi said, "I often say  that a nation's fortunes are linked to its neighbourhood. There are many in India who would argue that India is too large to need her neighbours.

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"There are many in our region who worry that India's economic size will hurt them. I disagree with both views. For one, we all need a stable and peaceful neighbourhood to concentrate on national development," he said.
The Prime Minister acknowledged that there were concerns in Sri Lanka about the huge trade imbalance.

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"I am prepared to work with you to address them. I want balanced growth in trade. We will try to make it easier and smoother for you to access the Indian market," he said on the first day of his two-day visit to the country, the first by an Indian Prime Minister since 1987.
"I also believe that countries do better when the entire region moves together," he said.
He said that the SAARC region was rich in resources and constitute a large market.
"We complement each other. Therefore, our cooperation can be of huge benefit to all of us," Modi said citing examples of smaller neighbouring countries like Nepal and Bhutan which have benefited from partnership with India.

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"There are already powerful examples in South Asia that show us that differences in size is no constraint to beneficial partnerships, if we use our strengths and seize our opportunities," he said.

The Prime Minister said India is opening up to the world and have Free Trade Agreements with ASEAN and others.
"We should ensure that Sri Lanka does not fall behind in the changing and competitive world. That is why India and Sri Lanka should move boldly to conclude a Comprehensive Economic
Partnership Agreement," he said.
"You should also attract investments from India for exports to India. That should be the natural outcome of our proximity and your strengths," he said.
Modi said the global confidence in India has been restored and the world's engagement with the country is at a new level.
"But, the first claim on us should be that of India's neighbours," he said, adding "there is new purpose and clarity in our policies; a new vision for inclusive development; new standards in our governance; and, a new level of energy in our economy."
Earlier addressing Sri Lankan parliament, Modi assured Sri Lanka of India's "full commitment" to development partnership it.

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