The issue among others was came up for discussion during the meeting between the visiting Sri Lankan Minister for Development Strategies and International Trade, Malik Samarawickrama, and Commerce and Industry Minister Nirmala Sitharaman here.
"The leaders reviewed progress of the proposed ETCA between India and Sri Lanka and agreed to start negotiations on an expedited track for an early conclusion of the agreement, preferably before the end of the year," the commerce ministry said in a statement.
An Indian delegation is visiting Sri Lanka shortly in this regard, it said.
The leaders also agreed that early harvest measures may be negotiated but these would come into effect on the date the agreement comes into force, it added.
The two sides noted that India-Sri Lanka free trade agreement, made operational in March 2000, has been beneficial to both the countries.
Both leaders discussed several issues related to bilateral trade and investment.
Further it said that the ministers agreed to hold a meeting of the reconstituted India-Sri Lanka CEO's Forum at an early date.
The bilateral trade between the countries stood at USD 6 billion in 2015-16 as against USD 7.45 billion in the previous fiscal.