Kumaratunga arrived here this evening to a red carpet welcome by Singh, Foreign Secretary K Raghunath and other senior officials. Tomorrow, she will meet President K R Narayanan and Prime Minister Atal Bihari Vajpayee, but all eyes are on her Tuesday morning meeting with Congress leader Sonia Gandhi.

For, last time Kumaratunga came on a State visit to Delhi, Congress leader P V Narasimha Rao -- who as Home Minister to Rajiv Gandhi in 1987 had voted against sending the IPKF to Sri Lanka -- was Prime Minister of India.

Officials of the Ministry of External Affairs say that a Free Trade Treaty may be possibly signed, but that some details still needed sortingout. On the political side, New Delhi remains watchful about the ethnic conflict in Sri Lanka, but would stick to its policy of non-involvement. ``That is a matter for Sri Lanka to resolve by themselves,'' the officials said.

Sri Lankan foreign minister Lakshman Kadirgamar confirmed to The Indian Express that India had ``not offered mediation'' on the conflict. On the other hand, Colombo had told New Delhi that it would ``not come to any solution without informing India. Consulting can lead to a lot of problems, but informing is a bonafide matter,'' Kadirgamar said.

He said that as many as 16 countries had offered to mediate in his country's civil war, such as the US, UK, France, Germany, Australia, South Africa, Canada and some Scandinavian nations. ``But we have politely refused them,'' he added.The signature on a bilateral free trade pact will be the highlight of Kumaratunga's visit, but it wasn't clear whether an inter-Ministerial wrangle between the Commerce and External Affairs Ministries on thisissue, had been resolved.

For the last two years, such infighting has hampered coordinated foreign policy on Sri Lanka. Ten days ago, at the bilateral Joint Commission meeting held , Commerce Secretary P P Prabhu is said to have given an ``impassioned speech'' against giving Colombo too many trade concessions. At the same meeting, Singh is learnt to have reassured Kadirgamar, that India's commitment to a treaty with Sri Lanka was ``unambiguous and irreversible. We mustn't be defeated by detail,'' Singh added.

Kadirgamar pointed out that it seems as if the ``bureaucracy was not completely ready. I believe that we should not have any loose ends after the signing, let us wrap everything up before. I know Mr Jaswant Singh is in favour of a flexible and mutually accommodative agreement,'' he added darkly.

He said he was willing to understand the losses to certain industries in India if trade was fully free, but argued that the huge current disparity was already hurting Sri Lanka. India exports about $560million to Sri Lanka annually, it only imports $42.7 million worth of goods.