The agreement is also expected come with mutual recognition of standards to prevent health rules for example being used to keep Sri Lankan goods out of India.
A top Sri Lankan apparel exporter MAS, has already urged the signing of the new deal.
Sri Lanka and India signed its first free trade deal 10 years ago.
Trade and service liberalization reduces taxes on the free exchange of goods between two nations, brings prices down and increases their access to lower income classes.
In the process freer traded enhances the living standards of ordinary citizens.
At the time Sri Lanka had kept 1,180 items on its 'negative list' which do not get tax concessions out of a total of 5,112 items to protect domestic industries, though it hurts consumers.
Analysts have pointed out that under the existing deal India opened 4,383 items for zero duty including 233 garment items and only 196 items attracted normal customs duty.
Analysts say the CEPA proposed to reduce the India list to 82 item