The two-day talks kick off at a time when Bangladesh is desperately looking for market in the region and Colombo has already added a zest to its economy with a similar deal with India.

In less than a month, Dhaka's first round talks on FTA with three South Asian nations are expected to be complete as discussions with Pakistan will open on November 16. The process began with Indo-Bangla FTA talks on October 20.

"As FTA is the only agenda, Bangladesh as a least developed country will raise issues including special and differential treatments, trade deficit and non-tariff barriers in the talks," said a commerce ministry official.

Elias Ahmed, joint secretary of the commerce ministry, and Tilak Collure, additional secretary of the commerce and consumer affairs ministry of Sri Lanka, will lead their sides in the talks.

South Asian Association for Regional Cooperation (Saarc) members now prefer to negotiate FTA on bilateral basis as the region failed to tap the potential for economic cooperation collectively.

Bangladesh and India held joint secretary level trade talks on FTA in Dhaka on October 20-22, with the decision to meet again in New Delhi in January to sign a pact as early as possible.

Of the seven-member Saarc grouping, only India and Sri Lanka have signed an FTA on bilateral basis. Both Delhi and Islamabad are willing to enter into FTAs with Bangladesh bilaterally.

According to the Export Promotion Bureau, Dhaka and Colombo have a small-scale bilateral trade. In the fiscal 2001-02, Bangladesh exported goods worth $2.07 million while its imports totalled $6.12 million.

Sri Lanka High Commissioner in Dhaka Gamini S Munasinghe on Thursday said Colombo was interested to import cement and pharmaceuticals from Bangladesh.

Sri Lanka produces a huge number of rubberised mattresses and other rubber products which are natural products and could be exported to Bangladesh, he felt.