17 July, 2009 - Published 14:15 GMT
The Indian government says that the way Sri Lanka deals with the Tamil issues has a bearing on the island's relations with the regional power.
Indian Prime Minister Dr. Manmohan Singh said that he urged Sri Lankan President Mahinda Rajapaksa to "do all he can" to resolve Sri Lanka's national issue.
He was answering a question by a parliamentarian at the Lower House of the Indian parliament, Rajya Sabha.
Dr. Singh said he spent "a very considerable amount of time" with President Rajapaksa on the fringes of the Non Aligned Movement (NAM) summit in Egypt discussing the plight of Sri Lanka's Tamils.
"I explained to him that we have a legitimate concern about the well being of Sri Lankan Tamils. It has bearing on Sri Lanka's relations with India," he said.
The Indian PM says he urged President Rajapaksa to "take all effective measures to provide meaningful relief and rehabilitation" for nearly 300,000 Tamil Internally Displaced People (IDPs) in 33 camps in the north.
However, it is "only the beginning of the process" of resolving Sri Lanka's national issue, he stressed.
"Sri Lankan government has to create conditions whereby the Tamil peoples' legitimate political aspirations for a life of dignity and self respect including the process of devolution," he said.
President Rajapaksa explained to the Indian PM that the government is taking all steps to re-settle IDPs within 180 days, Sri Lanka Information Department website said.
"He also explained the priority being given by the government to development activities in the North and East, with special impetus on development of the North, in the context of the enormous losses suffered by the people of the North under terrorism, and the lack of any progress in development activity in areas that were once held by the LTTE," the statement in the website said.
Many opportunities are available for investment in the north and east, it added.
"The possibility of Indian investment in these areas, mutually beneficial to the two countries, was discussed with the objective of further exploring the opportunities that are now being worked out," according to the information department of Sri Lanka.