The decision was made during bilateral talks between the two countries, led by visiting Sri Lankan Foreign Minister Rohitha Bogollagama, and Bangladesh Foreign Adviser Iftekhar A Chowdhury, where they also committed themselves to increasing the paltry $39 million bilateral trade.

The visiting Sri Lankan delegation, which includes two other ministers for collecting a relic of Gautam Buddha's hair from a Buddhist temple in Chittagong, also met Chief Adviser Fakhruddin Ahmed earlier yesterday.

Fakhruddin asked the Sri Lankan delegation to invest in Bangladesh, especially in the jute sector, as the government opened up jute mills to foreign investors, reported UNB.

The delegation will fly to Chittagong this morning, where the foreign adviser will officially hand over the relic of Buddha's hair to his counterpart in a ceremony later today.

Religious Affairs and Moral Upliftment Minister of Sri Lanka Pandu Bandaranaike, Trade Minister Bandula Gunawardena, and the Chief Priest of that country visited the International Buddhist Monastery in Dhaka.

Meanwhile, in a joint news briefing after the bilateral talks, Iftekhar told the media that Dhaka and Colombo will activate all bilateral mechanisms, starting with a Bangladeshi trade delegation who will visit Sri Lanka soon to boost export to the island nation.

Bogollagama told reporters that Colombo is also keen on Bangladesh's emerging banking and financial sectors as well as strengthening the existing links in the apparel industry.

Bangladesh exported around $13 million worth of goods to Sri Lanka in the FY 05-06, and imported goods of around $11 million in the same period, according to official figures.

Bogollagama also met the Sri Lanka Bangladesh Chamber of Commerce (SBCCI) at Hotel Sonargaon in the capital, where he said the trade volume 'means nothing' to him, rather the two sides should minimise all trade related difficulties.

He said Bangladesh can export cement to Sri Lanka, as the latter is annually producing only 2.7 million tons of cement against its demand for 3.5 million tons per year.

In reply to a query, the Lankan foreign minister also said Bangladeshi businesses should engage further with the Sri Lankan commerce ministry to receive long-term visa facilities.

Iftekhar said Sri Lanka expressed a keen interest in pharmaceuticals, leather goods, cement, and potatoes among other commodities.

He added that civil aviation delegates from both sides will sit at the earliest to re-establish direct air links that were severed in 2002. While, Bogollagama agreed that both sides should sit to ensure that the two countries are connected 'as fast as possible'.

The two sides also plan to meet to discuss direct shipping links and are looking to take steps to reduce shipping costs between Chittagong and Colombo, he said.

Bangladesh foreign ministry sources said Colombo has been demanding greater 'freedom rights' for their flights to Dhaka, an issue that offers itself for quick resolution.

Asked whether Sri Lanka is interested in signing a Free Trade Agreement with Bangladesh, Bogollagama said at this stage they are looking to further cooperate on economic matters to generate higher bilateral trade to reach a point where both economies are ready to graduate to an FTA.

Bogollagama also expressed his gratitude for Bangladesh's donation of the relic of Gautam Buddha's hair, which he said will be a lasting monument of the friendship between Sri Lanka and Bangladesh.

The Lankan foreign minister also stressed the need for the two sides to boost intra-regional trade in South Asia. He also said the two sides looked at greater cooperation in BIMSTEC.

He also quoted the chief adviser to say that Fakhruddin condemned terrorism in all its forms and will look to cooperate with Colombo to eliminate terrorism from the region.