India and Sri Lanka on Friday signed four agreements during Indian PM Narendra Modi's maiden visit to the country, the first bilateral tour by an Indian premier in 28 years.

The Indian Prime Minister announced a slew of measures aimed at resetting ties with the strategic neighbour.

Modi, who arrived in Colombo on Friday morning on the final stop of his three-nation tour of Indian Ocean island nations covering Seychelles and Mauritius, met Sri Lankan President Maithripala Sirisena and discussed bilateral and issues of regional importance.

"I am conscious of the significance of this visit. This is the first stand alone bilateral visit by an Indian Prime Minister since 1987," he said at a joint press meet with Sirisena, who was in the country in February on his first foreign trip after assuming office in January.

Modi said his meeting with Sirisena was very productive. It "gives me confidence and optimism about the future of our relations," Modi said.

The two sides signed four agreements on visa, customs, youth development and building Rabindranath Tagore memorial in Sri Lanka.

"The agreement today on cooperation between our customs authorities is a step in that direction. It will simplify trade and reduce non-tariff barriers on both sides," PM modi said.

He said the progress made by two countries reflects "our shared commitment to stronger economic cooperation".

"Our trade has seen impressive growth over the past decade. I am aware of your concerns about trade with India. As I said in Delhi, we will try and address them," the Prime Minister added.

Modi said the country stood ready to help Trincomalee become a petroleum hub and announced that the central government would provide a fresh Line of Credit of up to US $318 million for the railways sector in Lanka.

"This will be used to procure rolling stock, and to restore and upgrade existing railway track," he said.

The Prime Minister also said that the Reserve Bank of India and the Central Bank of Sri Lanka have agreed to enter into a Currency Swap Agreement of US $1.5 billion to help keep the Sri Lankan rupee stable.
(With inputs from PTI)