This decision was taken after the two leaders held bilateral talks.
Another $50 million has been granted to fight terrorism.
Modi stated that the mandate given to Sri Lankan President Gotabaya Rajapaksa is the expression of the ambitions of the people of Sri Lanka for a strong country.
President Gotabaya Rajapaksa meanwhile, extended an invitation to Indian Prime Minister Narendra Modi to visit Sri Lanka as the first head of State to arrive in the island nation during his tenure.
The discussion was held at the Hyderabad mansion and lasted around one hour.
The two leaders stressed on the need to strengthen bilateral trade development between the two countries.
The two leaders also discussed the longstanding Indo-Sri Lanka fishing issues.
President Gotabhaya Rajapaksa had assured the Indian Premier that Sri Lanka would maintain close economic cooperation with India. Subsequent to the discussions between the two leaders, they expressed their views at a joint media briefing.
Prime Minister Modi expressed hope that the reconciliation efforts would be continued in Sri Lanka and also expressed views regarding the development of the North and East.
Sri Lankan President Rajapaksa also thanked Prime Minister Modi for extending the invitation to him.
Subsequent to having lunch hosted by the Indian Prime Minister, President Gotabhaya Rajapaksa also placed a note in the special visitor’s book at the Hyderabad mansion.